Here are some musts that need to be achieved in order for travel expenses to be deductible:

1. The travel MUST be overnight and away from Home
2. The travel MUST be related to your current business
   1. Exploring an unrelated business will not count
3. The travel MUST be reasonable for your business and industry
   1. Example - Is traveling to Bali to meet a vendor reasonable?  Likely not.
   2. The IRS does not like lavish travel but provides little guidance
4. The travel MUST occur for a business purpose & profit motive 
   1. Always think of a profit motive first!  What can you do on the upcoming travel 
      that will lead to a return in your business.  Get creative!
      
      
      

Travel Days

So long as greater than 50% of the days on the trip are business days, the travel days can count as business.

Maximize Business Days

A business day is a day in which you spend greater than 4 hours on qualified business activities.  For example, you travel on Thursday and on Friday, you spend 5 hours meeting with 2 prospective customers at your destination.

• What does not count? Sitting poolside on your laptop!
• Pre-plan and find activities to take up greater than 4 hours for business.
  • Like-minded business owners?
  • Prospects?
  • Vendors?
  • Market Research?

Total Business vs Personal Days

You must achieve >50% of total days as business days vs personal days to maximize your deductions. If your total business days are less than 50%, none of the travel will be deductible.

Tips to Maximize Your Travel

• "Sandwich" Days - You can strategically sandwich personal days between work days. For example, Thursday is a travel day, and Friday is a 5-hour business day. Saturday and Sunday are family days. Monday is another business day, and Tuesday is another travel day when you go back home.
  • Weekends and holidays falling between two business days get counted as business days. Thus, all destination days are business days. All travel, lodging, and meals are deductible, including Saturday and Sunday.
• What IS deductible if more than 50% of travel is for business purposes?
  • Meals - 50% of meals are deductible for business days
  • Lodging - all business days
  • Transportation (flights, cars, Uber) - all business days
• What is NOT deductible?
  • Family costs - if you bring family, do NOT pay for their travel via a business credit card, which can cause “basis issues."
    1. When in doubt, spend the money personally and use your Accountable Plan to get reimbursed for the business travel
  • Entertainment - catching a Sox game while in town?  Entertainment is not deductible BUT if the event is for business, the food and beer might be deductible!

Keep Detailed Records

In order to claim a travel deduction, you will need to keep accurate records of your expenses. This includes receipts for transportation, lodging, meals, and other miscellaneous expenses

What Card to Use?

• 100% business expenses = business card
• Mixed or allocated expenses = pay personally and then reimburse the business portion ONLY from the business. This reimbursement would be recorded in QBO as a travel expense, therefore securing your deduction.