I recently went to Johannesburg for a work-related conference, and I decided to take advantage of the proximity to my wife’s relatives in Senegal to meet up with the family there for vacation before heading back home to Washington, D.C. I left DC on January 10, attended the conference in Jo’Burg January 11through the morning of January 14, and spent the evening of January 14 through the morning of the 18th in Dakar. Thanks to the time change, I got back to DC the evening of January 18. I know that I can deduct a bunch of costs I incurred as work-related travel expenses, but am unsure as to how the side trip affects all this - I’m particularly curious as to the impact on the deductibility of the cost of my plane tickets. How does this work?
Based on the facts you've provided, you won’t be able to deduct the entire cost of the plane tickets, owing to your vacation, but you can deduct the portion which, according to the IRS, is attributable to your business activities (i.e., the Johannesburg part of of your trip).
Your task is to figure out what portion of the overall plane ticket cost is attributable to “non-business activity on the way… from your business destination,” and to then subtract that share from the total plane ticket cost. As IRS Publication 463 explains, you do this by first figuring “the amount it would have cost you to travel between the point where travel outside the United States begins and your nonbusiness destination and a return to the point where travel outside the United States ends,” and then “determine the nonbusiness portion of that expense by multiplying it by a fraction,” where “[t]he numerator… of [that] fraction is the number of nonbusiness days during your travel outside the United States and the denominator... is the total number of days you spend outside the United States.”
Huh? Don’t fret - here’s how that breaks down in your case.
Let’s start with arriving at the fraction called for by the guidelines. Your total trip was nine days (January 10-18); that’s the denominator. The numerator is your total non-business days: that’s three (January 15-17; the 14th and 18th are business days, despite that you were in Senegal for part of both). The fraction, then, is 3/9.
Now subtract 3/9 of the round-trip fare you would have incurred had you traveled directly between DC and Dakar (that’s right - Dakar, not Johannesburg) and then back to DC. So if the DC-Dakar-DC trip would have cost, say, $1,100, you’d do 1,100 x 3/9, to get $366.
Next, subtract that $366 from the total airfare you actually paid for DC-Jo’Burg-Dakar-DC. If the latter were, for example, $1,600, then you’d subtract $366 from that to get $1,234. That ($1,234) is how much you can deduct for airfare.
Note that you can’t deduct any travel costs (like meals or lodging) for the time you were actually in Dakar, as that stretch was for pure non-business purposes.
To learn more about deductions for work-related travel abroad, see “Deductible Expenses for International Business Travel.”