How To Make Money On Holidays
How to turn your fun trips into tax cuts
How would you like to deduct every dime you spend on vacation this year? Tim did. Legally.
Have you ever taken a vacation and wished that you could legally take the expenses as a tax deduction? In order to make it work you have to make sure that you do some very simple things.
How to turn your fun trips into tax cuts
How would you like to deduct every dime you spend on vacation this year? Tim did. Legally.
1. Make all your business appointments before you leave for your trip.
You must have at least one business appointment before you leave in order to establish the "prior set business purpose" required by the IRS.
Hawaii
Tip: It would be vital for Tim to document this business purpose by keeping a copy of the advertisement and all correspondence along with noting what appointments he will have in his diary.
2. Make It All "Business Travel
In order to deduct all on-the-road business expenses, you must be traveling on business. By definition, you are on business travel whenever you are sleeping overnight in a strange bed - conducting business, that is!
Tip: Remember: You don't need to live far away to be on business travel.
3. Make sure that you deduct all of your on-the-road -expenses for each day you're away.
For every day you are on business travel, you can deduct 100% of lodging, tips, shoe-shines, laundry and dry cleaning, car rentals, and 50% of your food. Tim spends three days meeting with potential distributors.
According to the IRS, no receipts are required for any travel expense under $75 per expense.
Adequate documentation shall consist of amount, date, place and essential character of the expense.
Example: If, however, Tim stays in the Bate Motel and spends $22 on lodging, will he need a receipt? You need receipts for all paid lodging.
Tip: Not only are your on-the-road expenses deductible from your trip, but also all laundry and dry-cleaning costs for clothes worn on the trip. Thus, your first dry cleaning bill that you incur when you get home will be fully deductible.
Sandwich weekends between business days.
Interestingly, the IRS notes that if you have a business day on Friday and another one on Monday, you can deduct all on-the-road expenses during the weekend.
Example: Tim makes business appointments inFlorida
5. Make the majority of your trip days business days.
The IRS says that you can deduct transportation expenses if business was the primary purpose of the trip. The majority of the days in the trip must be for business activities.
San Diego
Friday is a business day because he had a seminar. Monday is a business day because he met with prospects and distributors in pre-arranged appointments. Saturday and Sunday are sandwiched between business days, so they count. Tuesday is a travel day.
San Diego
The important point is that Tim would be spending money on lodging, airfare.
With proper planning, you can deduct most of your vacations if you combine them with business.
You must have at least one business appointment before you leave in order to establish the "prior set business purpose" required by the IRS.
Tip: It would be vital for Tim to document this business purpose by keeping a copy of the advertisement and all correspondence along with noting what appointments he will have in his diary.
2. Make It All "Business Travel
In order to deduct all on-the-road business expenses, you must be traveling on business. By definition, you are on business travel whenever you are sleeping overnight in a strange bed - conducting business, that is!
Tip: Remember: You don't need to live far away to be on business travel.
3. Make sure that you deduct all of your on-the-road -expenses for each day you're away.
For every day you are on business travel, you can deduct 100% of lodging, tips, shoe-shines, laundry and dry cleaning, car rentals, and 50% of your food. Tim spends three days meeting with potential distributors.
According to the IRS, no receipts are required for any travel expense under $75 per expense.
Adequate documentation shall consist of amount, date, place and essential character of the expense.
Example: If, however, Tim stays in the Bate Motel and spends $22 on lodging, will he need a receipt? You need receipts for all paid lodging.
Tip: Not only are your on-the-road expenses deductible from your trip, but also all laundry and dry-cleaning costs for clothes worn on the trip. Thus, your first dry cleaning bill that you incur when you get home will be fully deductible.
Interestingly, the IRS notes that if you have a business day on Friday and another one on Monday, you can deduct all on-the-road expenses during the weekend.
Example: Tim makes business appointments in
5. Make the majority of your trip days business days.
The IRS says that you can deduct transportation expenses if business was the primary purpose of the trip. The majority of the days in the trip must be for business activities.
Friday is a business day because he had a seminar. Monday is a business day because he met with prospects and distributors in pre-arranged appointments. Saturday and Sunday are sandwiched between business days, so they count. Tuesday is a travel day.
The important point is that Tim would be spending money on lodging, airfare.
With proper planning, you can deduct most of your vacations if you combine them with business.
