How to Turn Your Vacation into a Tax Deduction

Vacations are meant to be a stress-free getaway from everyday worries. Skyrocketing vacation costs can keep that from happening, with every new charge on your card reminding you of just how much is costs to unwind. A happy middle ground exists for those who travel for work. If you fall in this category, it’s easy to sneak a vacation, even with the whole family, into a work trip. Using the right tax deductions can perhaps even turn that into a free vacation. Here are some tips to get the most out of your travel budget.

Have Work Scheduled Where You’re Heading

No, bringing your laptop into the woods will not qualify your camping trip as a working vacation. Attending a conference or meeting with a prospective client in another city, however, will. Schedule at least one work meeting ahead of your trip if you want to be able to deduct the expenses from your taxes. The IRS demands a “prior set business purpose” for your trip, so just talking shop with strangers while you down mai tais won’t cut it. If your trip is primarily business, however, 100% of transportation costs and 50% of food and lodging costs may be deductible. Travel days, business days, weekends and holidays all qualify for deductions, but days off do not. So either plan your days wisely, or be prepared to foot the bill for some of your vacation.

Family Expenses are Not Covered

If you wish to take along your family on vacation, keep in mind that their extra expenses will have to be paid out of pocket. For example, if you are flying and need 3 extra airline tickets, those will not be tax deductible. But if you are driving, any costs you would have incurred would be the same regardless of how many passengers you have. Likewise, if you opt for a larger hotel room to hold you clan, only the standard room price can be deducted.

Keep Receipts

The IRS requires documentation for any expense over $75. If you want to deduct as much of your vacation as possible, you’ll want to keep good records of what you spent and where. Hand these expenses over to a tax professional, or input it in a tax preparation software like TurboTax to maximize your deductions and get the best savings. Once you’ve figured out how to successfully combine a business trip with a personal or family vacation, you’ll never look at travel the same again.