All work and no play makes Jack a dull boy (and Jill a dull girl). If you go on a business trip to an interesting destination, it would be nice to spend at least a little time sightseeing and/or relaxing. If you plan things right, you can mix business and pleasure during your trip and still get a tax deduction.
Maximize Your Business Days
If you mix business with pleasure on your trip, you have to make sure that you have enough business days to deduct your transportation costs--airfare or similar expenses. You’ll need to spend more than 50% of your days on business for domestic trips and more than 75% for foreign trips of more than 14 days.
You don’t have to work all day for that day to count as a business day: Any day in which you work at least four hours is a business day, even if you goof off the rest of the time. The day will count as a business day for purposes of determining whether your transportation expenses are deductible, and you can deduct your lodging, meals, and other expenses during the day, even though you worked only four hours.
You can easily maximize your business days by taking advantage of this rule. For example, you can:
- work no more than four hours in any one day whenever possible
- spread your business over several days—for example, if you need to be present at three meetings, try to spread them over two or three days instead of one, and
- avoid using the fastest form of transportation to your business destination—travel days count as business days, so you’ll add business days to your trip if you drive instead of fly. There’s no law that says you have to take the quickest means of transportation to your destination.
Take Advantage of the Sandwich Day Rule
IRS rules provide that days when you do no business-related work count as business days when they are sandwiched between workdays, as long as it’s cheaper to spend the off day away than to go back home for them. If you work on Friday and Monday, this rule allows you to count the weekend as two business days, even though you did no work.
Example: Kim flies from Houston to Honolulu, Hawaii, for a business convention. She arrives on Wednesday and returns the following Wednesday. She does not attend any convention activities during the weekend and goes to the beach instead. Nevertheless, because it was cheaper for her to stay in Hawaii than to fly back to Houston just for the weekend and fly back to Hawaii, she may count Saturday and Sunday as business days. This means she can deduct her lodging and meal expenses for those days (but not the cost of renting a surfboard.
Side Trips Are Not Deductible
Expenses you incur if you stop at a nonbusiness (personal) destination en route to, or returning from, your business destination are not deductible. For example, if you stop for three vacation days in Paris on your way to a weeklong business meeting in Bangladesh, you may not deduct your expenses from your Paris stay.