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Ways Through the Maze: A Tax Guide for Indies

#26: Is it a vacation or business travel?
June 2010
Hello Indies,

Many of you are trying to stretch vacation dollars to go just a little farther. One of the ways to do that is to plan your summer journey so that it fulfills the requirements of business travel. If you can do that you'll be able to deduct the costs of the trip as a business expense and thereby save some tax dollars.
 
 
Below are some questions from indies who were looking for ways to deduct their travel costs as business expenses. See if they give you any ideas.
 
Happy Trails,
June
Visit my blog at http://junewalkeronline.blogspot.com for 100s of Q&As from your fellow indies.
June Walker
Consultant to Indies

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1. Introduction
2. Self-employed in Business 
3. Three Ways to Deductions
4. Expenses in General
5. Office-in-the-Home
6. Auto & Transportation
7. Travel or Transportation
8. Meals & Entertainment
9. Income
10. Taxes  
11. Recordkeeping
12. A Final Caution

 
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  • To promote indie-business self-confidence.  
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  • Each issue will include one or more Q&As that come out of real-life situations of indies who have visited my blog or my website. 
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Switzerland Travel
Hi June,

I hope you can answer this for me. I am a freelance writer who contributes regularly to our regional paper as well as a magazine we recently launched. I am what you would call a generalist (features) covering all kinds of topics -- design, food, interviews/profiles, travel, social issues etc... I get to write pretty much whatever I pitch.

My question is this: Because of my inherently lazy nature, I didn't hustle nearly as much as I could have and so didn't make more than $1500 this year.


The paper wants to run a travel story on a city in Switzerland I visited with my husband when he was on business. What can I deduct?

Are there limitations for deductions based on how much I get paid for an article? I will probably get $250 for this short piece.

Thanks so much! Your site has been a huge help so far! Thanks for your time

Robin -- Milroy Pennsylvania



Hi Robin,

First, know that, as long as you were pursuing freelance income in order to make a profit  you may deduct all your expenses related to pursing that income. There are no limitations for deductions based on how much you get paid for an article.

Of all the parts of my book, SELF-EMPLOYED TAX SOLUTIONS, in only one instance do I advise readers that they'll have to refer to the section often, and that's the section on TRAVEL; the rules are too complicated to remember them all.  
 
I'll attempt a quick summary regarding your Switzerland trip. You didn't go there for business, so your general travel expenses are not deductible. You may deduct only the costs of the trip that specifically relate to the piece you would write. For instance, if you paid admission to a cultural museum and that is the attraction you wrote about.
 
The best way to get the most business travel deductions is to know the rules and plan ahead.

Great! Glad my site is so helpful.

Cheers,
June

Spouse on a business Trip

June --

I am a Medical Physicist. I started part-time independent consulting in 2004 while still employed full-time. Consulting has increased and I am now a full-time independent (sole-proprietor). I just found your website--what a great resource, Thank You.

In September, I attended a professional conference in Boston. My wife joined me on the last day and we spent the next several days in New Hampshire. I have employed her to handle finances and admin since 2006. Naturally we discussed some of the business aspects of the conference while we were in NH but that was not the purpose of the trip for her. Are any of her expenses deductible?

Is there a best mechanism to substantiate deductibility for spouse/employees for business conferences?

Thanks, Joe
Dallas, TX


Dear Joe,

I assume from your email that your wife is your employee. What follows applies only if this is the case.


You may deduct all the costs of your employee's travel expenses in the exact same manner as you may deduct yours as the employer. So, if Boston were the business portion of your trip and New Hampshire were the fun, or personal, portion, then you cannot deduct the New Hampshire costs nor could you deduct the cost of your employee's New Hampshire travel.

When you take an employee on a business trip you must be able to show the necessity of having that person with you. Whether it's to transcribe notes, schedule appointments, wine and dine associates, there must be a clear business reason for attendance. This is especially so if the employee is your spouse.

If your wife-employee handles only your recordkeeping and secretarial chores then you must find a reason for her to accompany you. For instance, is she a good researcher? Can she investigate primary source documents for you at the university's library for non-circulating material while you attend the conference?

Best,
June
 
Visit here husband-wife business for more info.

On a business trip? No deduction for personal expenses.

Hi.

I'm a business owner online retailer.

Is it possible to deduct expenses like gas mileage, meals, etc on Saturdays and Sundays if I'm conducting business in the US?

For example, I travel from New York to California for business meetings on Friday and Monday. Can I deduct my weekend expenses in between? If the answer is yes, then I have 2 concerns: 1. If I wanted to go to the park or zoo on Saturday of my business trip, may I deduct my parking fees and meals at the park/zoo? 2. May I deduct all the mileage for that weekend, even though I'm not conducting any business (such as driving from the hotel, to the zoo, to a restaurant, and back to the hotel)?

Thanks!
Jamie
El Paso Texas


Dear Jamie,


If I understand you correctly, you travel from NY to California on Friday for a Friday business meeting. You stay in California for the weekend in order to attend a business meeting on Monday. On Monday you return to NY.

If that is so you may deduct the cost of getting to and from CA. All the meals and lodging while traveling to and from CA and while in CA.
 
You may not deduct any personal expenses such as costs to attend or get to the Zoo or a show.


There's more info on travel expenses in these posts expenses -- travel  .

Best,

June

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