This week we are continuing our series on Tax Deductible Vacations. Last week we discussed how you can deduct expenses related to having your spouse accompany you on a business related trip. Now let's step it up and see how we can deduct an entire weekend of vacationing using The Sandwich Rule.
What is The Sandwich Rule?
IRS rules provide that days when you do no business-related work count as business days when they are sandwiched between workdays. If you work on Friday and Monday, this rule allows you to count the weekend as two business days, even though you did no work. With a little planning, you could end up being able to deduct all the days of your trip.
For example, if your event starts on Monday, you can fly in on Thursday, have a business meeting on Friday, vacation over the weekend with your spouse and attend your event on Monday. This, my friends, is The Sandwich Rule.
What is Considered a Business day?
You don't have to work all day for a day to count as a business day: Any day in which you work at least four hours is a business day, even if you spending the remainder of the day vacationing. The day will count as a business day for purposes of determining whether your transportation expenses are deductible, and you can deduct your lodging, meals, and other expenses during the day, even though you worked only four hours. However, personal costs related to your "vacationing" will not be deductible.
Call us if you have any questions regarding your tax deductible vacation, because the laws are a little tricky in this area and not documenting the trip correctly will kill the deductibility of your trip.