Is Your Family Vacation Tax-Deductible?

by in Tax Issues

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Summer is nearly here – and your children are about to be released from school for the summer. Inevitably, you’re going to do some traveling. With fuel prices as high as they are, all forms of transportation are more expensive than last year.

How can you recoup some of the costs? Turn your vacation into a tax deduction.

How? 

Practically every industry has courses, seminars, workshops, trade shows or other events taking place in desirable vacation spots.  Even Las Vegas has turned into a family town. They provide unlimited entertainment and services for children. Getting child-care is easy, so the adults could get some time for themselves.

Just Deducting Your Costs

Bringing your spouse and children along to a business conference or trade show can cost very little extra, depending on how much time you have off for the trip. For instance, if you drive, it costs nothing extra to bring your whole family – as long as you fit into one car and one hotel room. While your room is probably fully deductible, don’t deduct any extra fees for cots, resort fees for the family, and the kids’ room service. Your meals during the business days of the trip will be deductible – theirs will not.

Note: if a double room costs more than a single room, you may only deduct the cost of the single room. However, employees have the option of using the IRS per diem rates for lodging. Often, they will be higher than the fee you paid for the room. Using per diem rates for one trip during the year means you must use them for all trips during the year.

Even if you diligently adhere to your business duties, you still have the evening to spend with them. And if you plan the business vacation properly, you might even have a weekend at the beginning or the end, to spend with them. For instance, if an event starts on Monday, you can arrive on Saturday and perhaps arrange to meet some colleagues for discussions for an hour or two on Saturday and/or Sunday.

Deducting the Family, too 

When your children and your spouse actively work in your business, you can to deduct their expenses, as well. But they would have to be working during your event, or registered to take the courses with you.

Think of them just as you would any employee who came to a conference or trade show. They have duties to perform, courses to attend, continuing education to earn. Or if they are at a trade show, they should be working your booth, named in your brochures, picking up contacts or clients or customers for later follow-up.

Personalized Business 

Organized events are not your style? You want to visit with family and friends. Fine. Simply arrange to toss in a few business meetings in the mornings or afternoons. Use the Internet to find potential business associates, vendors, customers, clients, new jobs – or media interviews to promote your business. Arrange to schedule appointments to meet these folks – in writing. Email is fine.

Aside from being able to write off part of your vacation, you’re apt to make valuable new contacts, increase your business’s sales, or reduce your costs – or even do some PR to market your business.

Balance 

But remember, this is meant to be your family’s vacation, as well. Don’t overdo the business aspect and neglect the family time. Consider structuring the business time before and after a weekend – with the weekend being totally devoted to the family.

So tell us, have you ever taken a tax-deductible vacation?

About the Author - Eva Rosenberg

Eva Rosenberg, EA, founder of the popular tax advice site, www.TaxMama.com, is a nationally syndicated Dow Jones columnist at MarketWatch.com, an author and popular speaker and instructor. Please join the TaxMama family and get answers to your own tax questions.

 

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{ 2 comments… read them below or add one }

Tricia Meyer May 8, 2012 at 3:18 pm

This is a terrific post! I have been considering taking my family to New York for Affiliate Summit this summer. My husband does all of my programming for my sites and works with a couple of my consulting clients, so I think taking him along is the easy part. It’s figuring out to what extent I can deduct the days before the conference and some of the activities that will also include the kids.

Reply

Eva Rosenberg May 8, 2012 at 6:31 pm

Hi Tricia,

Thanks!
Have a great time at Affiliate Summit.

Essentially, look at the day before the summit and the day after that might qualify as business days – especially if you are wrapping them around the weekend.

See to it that your husband documents what he is doing at the Summit – i.e. workshops he attends and some notes on ideas he picked up to use on your site.

As to your children? Depending on their ages and their active involvement in your business…document their active participation in the Summit – or just forgo the children’s costs for this year. Do a little planning for next year.

Hugs
Eva

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