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A Tax Savings Guide to the Holidays: Tax Deductible Travel

Schedule a business meeting on the way to visit family and you can deduct some of your travel expenses

For many of us, the holiday season is synonymous with travel. Often very expensive travel. Whether it’s the ever-climbing price of gas or airfare for the entire family, travel expenses can certainly take a chunk out of your wallet.

You may be able to save a little money by scheduling a business meeting – for example with a client or a vendor – on your way to visit family and friends. This would allow you to deduct some of your travel expenses on your tax return.

According to the IRS, “travel expenses are the ordinary and necessary expenses of traveling away from home for your business, profession, or job.” You must be away from home for substantially longer than an ordinary work day and your travel or work must require sleep or rest.

These include

  • travel by airplane, train, bus, or car between your home and your business destination
  • using a car while at your business destination
  • taxi fare and other transportation between the airport/train station, hotel, and business destination
  • meals and lodging
  • tips related to any of these services
  • dry cleaning and laundry
  • business calls
  • other similar ordinary/necessary expenses related to the trip Continue reading “A Tax Savings Guide to the Holidays: Tax Deductible Travel”
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Business Travel Tax Deductions

Many of the expenses involved in a business trip are tax deductible

Those who have to do a lot of traveling for work will be relieved to know that you can deduct many of those expenses and thus significantly lower your tax bill.

What travel expenses can I claim?

According to the IRS, you can claim the “ordinary and necessary expenses of traveling away from home for your business, profession, or job.”

Be warned: the expenses cannot be “lavish or extravagant” in the eyes of the IRS. Obviously no personal expenses are deductible either. It might make sense to exclude questionable expenses from your return as they can increase the chance of you getting audited.

The travel expenses you can deduct include Continue reading “Business Travel Tax Deductions”

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A Different Sort of Tax Holiday

Six tips to lower your tax bill during the holiday season

December’s no time to forget about taxes! Follow these tips to maximize your tax savings while you celebrate.

  • Plan tax deductible travel

Dreading that expensive trip to Grandma’s? Schedule a meeting with a client or vendor on the way and the travel there and back is tax deductible. Family visits are so much better when part of the trip’s on the IRS.

  • Treat yourself (to a tax deductible gift)

The holidays aren’t just a great time to give to others, they’re also a great time to buy yourself that something you’ve been craving all year. And if that present is tax deductible, you save money on your taxes too!

Most tempting are tech toys such as iPads and smartphones. You can deduct electronic purchases if you are self-employed, have a hobby that generates income, or work for an employer that won’t cover business expenses.

The IRS is pretty strict with equipment purchases, so it’s important you be able to demonstrate that you use the equipment at least 50% of the time for business, and that it’s a usual and necessary expense, given your line of work.

Note that if you are an employee of a business that doesn’t cover equipment purchases, you can only deduct expenses that exceed 2% of your household’s AGI. Continue reading “A Different Sort of Tax Holiday”