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Combining Business and Personal Travel

If you run your own company and travel for business, you may be tempted to combine work with pleasure. That’s okay, as long as you don’t trip up on tax rules. Your tax professional can advise you as to what you can or cannot do.

TAX-SMART TRAVEL

Generally, businesses can deduct the cost of airfare, lodging, car rentals and meals from taxable income when used for legitimate business purposes.

But when you combine personal and business travel, it gets a little more complicated. You can still deduct transportation costs for you, but not for any family. Also, you may only deduct the reasonable cost of lodging, which in this case would be single or double occupancy. You may also deduct the cost of shipping materials needed for business, your dry cleaning and even tips. You can’t, however, deduct any family activities.

SEPARATE EXPENSES

It’s important to keep detailed records, with the days, locations, time involved, names of people you meet and your purpose of business. Know that the IRS won’t likely allow deductions for a day when you have a 15-minute meeting and spend the rest of the day with your family at a theme park.

You will have to allocate all of your expenses for tax purposes. For example, you may deduct the cost (including gas) of renting a car only during those days when conducting business. So, if you spend $500 for a 10-day rental and you put in five days for business, you can deduct half of that as a business expense.

Finally, you will have to recognize the personal expenses paid by the company as an owner’s draw and part of your income.If you run your own company and travel for business, you may be tempted to combine work with pleasure. That’s okay, as long as you don’t trip up on tax rules. Your tax professional can advise you as to what you can or cannot do.

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Budget-Saving Holiday Travel

Americans usually travel during the holidays and it can be expensive. Here’s how to save money on the ground and in the air.

ROAD TRIP

Gasoline costs often rise during the holidays, so look for savings. Some wholesale buying clubs sell gasoline at discounts. You can also look for apps that alert you to the lowest gas prices wherever you travel.

If you expect to travel for hours, pack sandwiches, snacks, and games to keep the kids content. If you need lodging, use rewards cards if the establishment offers lower prices for members. Also, look for coupons for your favorite hotel when using rest stops on major highways and interstates.

BY AIR

Look to fly during off-peak hours, including on the holiday itself, for some of the lowest airline fares. Check the airline website’s baggage guidelines to avoid unexpected fees at check-in, which is usually more expensive than booking ahead of time.

COMBO

Enlist family and friends to pick you up from the airport, if possible. If you have to rent a car at your destination, don’t buy insurance if your auto insurer already provides rental coverage.