Is it possible to declare deductible tax items from a vacation trip? Wouldn’t it be a relief if we could declare some of our expenses as business-related and include them in our itemized tax deduction? Going on a business trip doesn’t mean you have to miss out on some great vacation experiences along the way. Get to know the expenditures you may consider tax deductible while on your business-related trips.
7 Vacation Costs That Can Be Deductible Tax Items
1. Advertising
Advertising is necessary for most businesses to further promote their goods or services. And because it is part of the cost of doing business, advertising expense is a deductible tax item. Advertising costs cover those expenditures related to advertisement production and distribution, events sponsorship, and even the production of business calling cards.
How can you deduct vacation expenses? Since events sponsorship is covered, you might want to sponsor an event in a vacation spot, like a resort for example. This way, you can attend the event and have your vacation there at the same time. But of course, make sure that the event you’ll sponsor is indeed promoting your business.
2. Board Meetings
Board meetings allow company directors to meet and discuss issues about their company. And so, any expenses incurred during board meetings may qualify for a business tax write-off. But for this to take effect, a company must keep a record of all board meetings-related costs — meals, travel, phone bills — to prove that they are necessary for the company’s operations.
How can you deduct vacation expenses? You may set your board meetings outside the office, like in a hotel. Schedule a lunch or dinner meeting so that your meals will be covered by business tax write-off. After the meeting, you can spend the rest of the day getting your much needed R&R.
3. Conventions and Trade Shows
Attendance in conventions and trade shows allows participants to gain new knowledge and skills that may benefit the company. As long as the participation is done for work purposes, all expenses incurred — meals, travel, lodging, etc. — may be considered tax deductible. But just like any other expenses, businesses must be able to prove that the attendance is really for the benefit of the business.
How can you deduct vacation expenses? Find a conference or convention related to your work. As these events do not last the whole day, you may want to spend the remaining time of your stay there for some relaxing time. This way, your lodging and meal costs will still fall under costs for the business and will, therefore, be tax deductible.
4. Gasoline Cost
As long as a vehicle is used for business — such as visiting customers, attending business meetings, and moving to various work locations — the cost for gasoline refill can be deducted from your tax dues. This only covers, however, small- and medium-sized vehicles such as cars, vans, and pickup trucks.
How can you deduct vacation expenses? Prefer driving your own car during business trips? On business trips via plane, only your ticket will be covered by tax write-off. But when you drive the company car, you may bring along family members and friends for a side-trip and still have the whole trip tax deductible.
5. Parking Fees and Tolls
Again, all expenses related to work travels may be written off from business tax. This includes costs in parking and highway tolls when you drive the company vehicle. As long as these costs are incurred while on your way to a work-related event, they are tax deductible.
How can you deduct vacation expenses? Schedule your vacation in between two business trips or meetings. This way, the costs incurred on your vacation travel will be sandwiched by work-related expenses.
6. Accounting Fees
For businesses or independent contractors, any work-related expenses related to bookkeeping, auditing, and accounting may qualify for a tax write-off. If you hired an accountant or financial advisor, the professional fees you pay are considered a deductible tax item. Or, if you purchased an accounting software, that is also covered by tax deduction.
How can you deduct vacation expenses? While taking a vacation, you may want to accommodate a lunch or dinner meeting with your accountant. While this is already considered working on vacation, your meal will be considered tax deductible.
7. Entertainment for Clients
Often times, businesses go the extra mile of making their customers happy. Some enjoy entertaining their clients through different means, mostly by treating them for some meals or drinks. This is actually covered as a regular business expense, hence it can be written off from business tax. Businesses, though, may only deduct up to 50% of entertainment costs.
How can you deduct vacation expenses? It’s always nice to treat your clients away from the stiff professionalism of an office board room. Possibly take them on a short getaway or to a nice place for a meal. You may want to set these events in a nice place such as a hotel or resort. This way, you get to entertain your client and have the trip itemized in your tax deduction.
If you’re looking to pay for some necessary business expenses while enjoying your time on a makeshift vacation, then it’s a good idea to see where you might be able to find a few tax breaks. You get to lessen the taxes you owe the government, plus you get to spend some money on that out-of-work relaxation you deserve.
Do you know other vacations tax-deductible items? Share with us your thoughts in the comments section below.