Make all your business appointments before you leave for your trip.
Most people believe that they can go on vacation and simply hand out their business cards in order to make the trip deductible. Prepare before you go! You must have at least one business appointment before you leave in order to establish the “prior set business purpose” required by the IRS.
Make Sure your Trip is All “Business Travel.”
In order to deduct all of your on-the-road business expenses, you must be traveling on business. The IRS states that travel expenses are 100 percent deductible as long as your trip is business related and you are traveling away from your regular place of business longer than an ordinary day’s work and you need to sleep or rest to meet the demands of your work while away from home. Tip: Remember: You don’t need to live far away to be on business travel. If you have a good reason for sleeping at your destination, you could live a couple of miles away and still be on travel status.
Be sure to deduct all of your on-the-road-expenses for each day you’re away.
For every day you are on business travel, you can deduct 100 percent of lodging, tips, car rentals, and 50 percent of your food. Tip: The IRS doesn’t require receipts for travel expense under $75 per expense–except for lodging.
1. Sandwich weekends between business days. If you have a business day on Friday and another one on Monday, you can deduct all on-the-road expenses during the weekend.
2. Make the majority of your trip days count as business days. The IRS says that you can deduct transportation expenses if business is the primary purpose of the trip. A majority of days in the trip must be for business activities; otherwise, you cannot make any transportation deductions.
To make sure that you can legally deduct your vacation when you combine it with business, check with a professional before you plan your trip.