Tax deductible vacations - tips
Unlike the Tax deductible vacations, how to increase tax deductions on travel post, this one will simply contain tips, more or less. I am putting these tax deduction tips for those who have no time to read thick books. Hopefully, it would give you more than a few ideas to discuss with your tax preparer. Now this - tax codes change constantly and I am not an accountant. Always seek professional accounting help, preferably from a CPA, which stands for Certified Public Accountant, credentials - if you have questions/issues that you or tax preparation software you use can not answer. And most importantly, document your business activity in as much detail as possible.
Tip #1 - take business related courses on U.S. cruise ships
Deduct up to $2,000 each year for yourself and possibly for your spouse, when you attend cruise ship conventions that are directly related to your business, provided,
- it takes place on the registered U.S. cruise ship
- all ports of call are in the USA or U.S. possession
- more than 50% of your total days should be spent on business
When you file the tax return, submit 2 supporting statements. The first must be signed by you and contain,
- days of transportation
- number of hours on the cruise
- program of scheduled business activity
The second statement must be signed by a ship officer or course official and show,
- total number of hours of the business convention/seminar
- number of hours you attended
Tip #2 - make your weekends tax deductible
Since the IRS rules for foreign travel are stricter than those for domestic travel, you can use them when planning for traveling in the U.S. Basically, when traveling abroad, you are allowed to count weekends and legal holidays as business days, if they fall between business meeting days. Then you can deduct on-the-road expenses for the weekends and holidays, and use these days to determine if your transportation expenses are tax deductible. Also, the IRS allows to count Saturday and Sunday as business days if the costs of staying over are less than the savings on airfare of traveling after Saturday, which is normally the case.
Obviously, this tip requires some careful consideration and proper documentation. Certainly a case to consult with CPA, who otherwise may not even bother to mention this tax deduction.
Tip #3 - count travel days as business days
How many of you heard about this tip? Possibly, one of the most overlooked tax deductible things that can be used on business vacations. If you travel to your business destination by a reasonably direct road and don't engage too much into non business related activities, you can count days on the road as business. You can combine your business day activities with some entertainment or sightseeing and still deduct this day, as long as you set up some sort of business activity in advance.
Tip #4 - buy a rental vacation property
Your rental not necessary must be a vacation house or a condo. It is just an added benefit. You see, when you have to travel to take care of the rental, such a trip is perfectly tax deductible, as long as you must be there. Things like collecting rent, repairing the property, dealing with handymen, checking area rents to see if you are charging enough or overseeing a management company work are some of those must-do things that justify your trip as business. And while you are busy with work cleaning and refreshing the rental between tenants, your family can relax on the beach, go fishing or skiing.
Tip #5 - take continuous education classes or visit colleagues
I have a friend whose wife is a doctor. Every year she must fulfill certain continuous education requirements. For doctors, especially specialists learning never stops. She has gone four years in a row to do just that, on Hawaii. The husband has traveled with her every time, and kids went twice.
Then, if you are in dire need to sharpen you skills, you can learn from the colleagues who dwell in some nice destinations. Every IT professional should go to Silicon Valley for the latest technology and such. In between, you can surely sandwich more than a few short trips to Napa Valley, Sonoma County or elsewhere.
Sat Feb 5, 2011 11:02AM | Copyright: www.bad-credit-advisor.com | More in Taxes | Comments (0)
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