With summer almost here, it’s prime time to plan a vacation. Today, everyone tries to find ways to maximize fun while limiting cost. If you are searching for summer vacation deals on plane tickets and hotels, don’t overlook the savings opportunities available in tax deductible expenses.
Tax Deductions are the Hidden Summer Vacation Deals
A lesser-known income tax fact is that tax deductions are available for business travelers’ summer vacation expenses. If you’re looking to cut vacation costs, follow our suggestions for a tax write-off that could be greater than advertised summer vacation deals. IRS defines business travel expenses as expenses that are ordinary and necessary to doing your job away from home. Transportation, lodging and food are a few examples of tax deductible business expenses.
How to Make Your Summer Vacation Tax Deductible
It’s widely known that business and pleasure don’t mix. But if you’re looking to maximize your tax deduction this summer, combining business with pleasure is the perfect strategy to enjoy summer vacations deals from Uncle Sam.
A flight to a business meeting is tax deductible, even if you choose to enjoy some personal time on the trip. Lodging, however, is only tax deductible on business days. There are gray areas about what the IRS considers a business trip. As a rule of thumb, if you are spending more time on business than on personal activities, it may be considered a business trip.
For domestic business trips, transportation, lodging costs and 50 percent of meal expenses on business days are tax deductible. If you drive, you may deduct 56.5 cents per mile as well as parking and tolls.
If you are lucky enough to receive a work assignment to a vacation destination, then you may be eligible to write-off all or part of your expenses. It’s important to keep a running diary of expenses in order to save money when you receive your tax refund. The IRS requires receipts for each travel expense over $75 and all lodging expenses. Small costs like drinks, snacks and inexpensive meals can be written off without a receipt.
Earn Travel Tax Write-offs When You Take Off
You can make the most of summer vacation deals this year by scheduling your trip smartly. For example: if you have business meetings on Friday and Monday, you can deduct expenses over the weekend.
It’s also important to keep a diary of travel expenses in the event of an IRS audit. You should Include the amount, date, place and business reason for the expense while recordkeeping. To maximize your tax deductions this summer, take the extra time to plan your trip while keeping in mind what is and what is not tax deductible.
At DeFreitas & Minsky, we specialize in all aspects of tax returns on Long Island. If you need advice about business tax planning and preparation or would like any more assistance, don’t hesitate to call DeFreitas & Minsky Certified Public Accountants at 516.746.6322 for more information.