Barbara Weltman for MSN Money writes: If you're lucky enough to get away this season, consider making vacation
plans that will enable you to deduct some of your travel expenses. The
only way to do this is to include certain activities in your trip.
Combine business with pleasure
Take a meeting for
business in a distant location and all of your airfare is a deductible
business expense even though you spend some time on your personal
activities. As long as the primary purpose of the trip is business
within the United States, transportation and lodging costs and 50% of
meal expenses on business days can be written off. If you drive instead
of fly, you can deduct 56.5 cents per mile, plus parking and tolls.
However,
there's no red line for determining whether the primary reason for your
trip is for business or pleasure. Clearly, if you spend more days on
business than personal activities, it demonstrates a business need for
the travel.
The key to nailing down a deduction for business travel is good record keeping. Be sure to carefully follow the rules outlined on IRS.gov so that if your return is questioned, you can back up your claims. Consider using an app such as Expensify to keep track of your business-related travel expenses.
If
your significant other accompanies you, there may be little or no added
expense (other than the cost of meals). The cost of a hotel room is
typically the same for one or two people. And if you drive your car or
use frequent flier miles, the travel costs are covered.
But
don't expect to turn a sightseeing trip into deductible travel by
claiming it's research for a book you might write someday -- the IRS
won't buy it. Similarly, you can't deduct travel costs for attending an
investment seminar.
Note: When it comes to traveling abroad, different rules determine whether some or all of your airfare is deductible.
Learn something
Enrolling in a business-related seminar or continuing education program
while traveling can be a tax-deductible way to learn something and
unwind. As long as the course relates to your job skills, you can deduct
your travel costs and the cost of the education. Again, keep careful
records and be sure to sign in for the classes you take.
Lend a hand
If you do volunteer work away from home, your
expenses can be deducted as an unreimbursed charitable contribution as
long as you itemize your deductions. You must be able to show there's no
significant element of pleasure, recreation or vacation in the travel.
Spending
a few hours working on an archeological dig may not suffice to make
travel costs deductible if the balance of the day is devoted to vacation
activities.
Meanwhile, participating in a Habitat for
Humanity volunteer program, for example, may entitle you to deduct your
out-of-pocket expenses. If you drive to the location of your charitable
work, you can deduct car expenses at the rate of 14 cents per mile,
plus parking and tolls.
Get healthy
Costs for maintaining or improving general good health are not
deductible, but if you suffer from a certain medical condition like
obesity, a stay at a health spa for the purpose of losing weight may be a
deductible medical expense. Be sure your doctor advises the treatments
are for a medical condition. If you drive to the spa, deduct car
expenses at the rate of 24 cents per mile, plus parking and tolls. Only
total medical expenses in excess of 10% of your adjusted gross income
(7.5% if you're 65 or older) are deductible, and you must itemize.
Final thoughts
Expedia.com, Priceline.com and Kayak.com may help you find good travel
rates, but they can't determine for you whether the costs are tax
deductible. Talk with your tax adviser to find out whether you can use
any of these tax breaks to shift some of the financial burden of your
summer vacation to Uncle Sam.
Tuesday, June 11, 2013
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