Deducting Travel as a Business Expense for Writers

Know the rules before you try to deduct travel as a business expense.

Wouldn’t it be great if you could deduct the cost of a foreign vacation? In effect, the IRS would be subsidizing your trip. Unfortunately, this is not so easy to do. Ordinarily, you can’t deduct any of your personal, living, or family expenses, including the cost of taking personal vacations. However, you can deduct business expenses; so if your foreign travel was conducted for business reasons, it would be deductible.

One way you might turn a foreign trip into a business expense is to be in the business of being an author and write a book about your travels. Unfortunately, it’s not easy for such a deduction to pass muster with the IRS. Many would-be authors have tried, but almost all have failed.

In one recent case, someone who planned to write a book about his travels, spent four months visiting South America, Asia, Africa, and Australia. He took thousands of photographs for use in the book and maintained a journal in which he wrote about his experiences.

When he prepared his 2006 taxes, he attached a Schedule C, Profit or Loss From Business, in which he listed his principal business as book author. He reported no business income, but claimed $17,294 in travel expenses, $1,474 in meal expenses, and $372 in telephone expenses for a total loss of $19,140. The IRS audited his return and disallowed all of the expenses.

The taxpayer appealed both to the U.S. Tax Court and Ninth Circuit Court of Appeal and lost both times. The Tax Court concluded that he was not in the business of being a book author, and therefore could not deduct his travel expenses as business expenses.

For any activity, including book writing, to constitute a business for tax purposes, a taxpayer must (1) engage in it to earn a profit, and (2) be involved in it regularly and extensively over a substantial time period. Writing can qualify as business even if it is not a taxpayer’s sole activity, but it must be engaged in primarily to produce income and earn a livelihood. It can’t be a “sporadic activity, a hobby, or an amusement.”

The court did not question that the writer wanted to earn a profit from his book and found that some facts suggested he was engaged in a business. For example, he created a business plan for his book; and he arranged his itinerary based on events he wanted to photograph for the book. However, five years after the trip was over, he had not yet published or completed the book. He had completed an early draft of 100 to 150 pages. And he had not published any other books. Thus, the court concluded that the writer had failed to show that he was serious about earning money from writing. The court found that the book project was undertaken as an isolated venture for personal satisfaction. (Oros v. Comm’r, 2013 PTC 404 (9th Cir. 2013).)

Had the writer actually published his travel book and earned money off of it, his writing activity could have qualified as a business, particularly if he had been able to earn a profit, at least in some years. Indeed, the IRS will presume an activity is a business if you earn a profit at it in any three of five years. However, writing travel books is hard and earning a profit off of a travel book that does get published (or any book, for that matter) is even harder.

For more on how to deduct travel expenses, see Nolo's Travel Deductions section.

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