I just got back from New Orleans, where I had a great time at the FinCon Expo. The good news is that, even though I had a great time, I also went for business purposes. That means that a lot of what I did during the five days I was in New Orleans was tax-deductible.
When you travel for business, you can plan it so that you get a tax deduction as well. It’s one of the things I plan out carefully when putting together my business calendar and do my tax planning. My home business benefits from the things I learn when I attend a conference, and my pocketbook benefits a bit from the tax deduction.
What Type of Trip Qualifies for a Tax Deduction?
There are some business trips that are obviously business trips. When you travel to set up a business deal with a new partner or client, or when you travel in for a strategy meeting. Other business trips aren’t quite so obvious, like my conference.
A conference is a good opportunity to go somewhere new, and get a taste of what another city has to offer, but you can’t use it as an excuse to party and get no business done. Additionally, the conference needs to be related to your business somehow. I attend the FinCon Expo because I’m an online financial journalist. I blog about money. It’s clearly related to my business. I also get to use my attendance at NMX as a business tax deduction because I’m a professional blogger. It’s what I do to earn money. Attending a blogging conference makes sense for my business model.
On the other hand, as much as I would love to attend Comic Con and make that tax-deductible, the reality is that it doesn’t have any material connection to my business. Until I start a nerdtastic comic blog and start writing about those sort of pop culture things, Comic Con isn’t tax-deductible.
It’s also important to make sure you conduct business while you are at your conference. I almost always pick up some new clients, and I talk business planning with my partner. Additionally, I make good connections for projects down the road. I also manage to get in a few interviews, and line up sources for future stories. All of this counts as business activity. You need to keep this requirement in mind if you bring your family along, and remember that your family’s expenses are not considered tax-deductible.
What Can You Deduct?
When you travel for business, you can deduct almost everything you spend money on related to getting you to the conference and back. This includes ground transportation to and from the airport, as well as the cost of the airfare and the hotel. If you have a suit cleaned and pressed for a meeting, you can deduct that cost. Deduct the cost of registration for the conference, and other costs related to attending.
It’s important to understand that you can’t deduct costs that you are reimbursed for. If your company pays for your cab ride between the hotel and the airpot, that’s not tax-deductible. Because I was a speaker at this year’s FinCon, I was reimbursed the cost of my ticket. As a result, I can’t deduct my registration cost.
I also like that I can deduct 50 percent of my meal costs. You have to be careful with this one, though. You need to make sure that your meals really are related to business interactions before you go crazy.
As always, proper documentation is needed when you want a tax deduction. Save all of the receipts related to your business trip. In some cases, it can also be helpful to make notes. What did you talk about while on your trip? I usually write a blog post documenting my conference activities, and this can serve as documentation that you really did participate in business-related activities while attending, from going to classes and seminars to engaging in fruitful business discussions with your colleagues.
You want the right documentation so that if you are audited, you have something to show the IRS. Keep everything, make notes, and be ready to defend yourself — just in case.
And don’t forget to have a little fun, too.