This week I'd like to talk about something I really enjoy and that is deducting my vacation. You could say I enjoy deducting it as much as I enjoy taking a vacation. I know, you are probably thinking "he is such an unromantic nerd who gets excited about deducting a vacation". Well you are right! I sometimes miss the boat in the romance department with my quest for the business deduction.....but I am evolving.
Recently, I have learned I can't tell my fiancée' that we are going to take a vacation upon which we are going to work just so we can deduct it. That is just not romantic and caring.
So I tell her "I am going on a business trip and I would love it if you could come along so we can spend some quality time together". For me the bonus is the deduction, I just can't tell her that....
So let's dive in to how to deduct travel with your spouse, girlfriend or significant other.......
Let's go over the Spouse Travel Deduction Basics:
The tax law allows no travel deduction for your spouse for business travel unless you can satisfy all three of the conditions below:
- Your spouse is an employee or board member of the business
- The travel of your spouse is for a bona fide business purpose
- Travel expenses of your spouse would otherwise be deductible.
If your spouse is an employee:
You can deduct their expenses of attending a seminar, conference or trade show. But they would have to be registered to take the courses with you or working your trade show event.
For tax purposes, you should think of your spouse 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, etc. Be careful to let your spouse know that you are not as romantic and loving to your employees as you are to your spouse.
If your spouse is a board member:
You could plan an out-of-town board meeting. You will just need to prove that you have an "ordinary & necessary" business reason for the out of town board meeting.
To do so, you will need to prove that the primary purpose of the trip is business & that business took place. You will also need to prove that getting out of town was necessary for business reasons.... An example would be to get away from the distractions of the office so "the board" could create a business plan.
This option will take more documentation effort than simply attending a seminar, conference or trade show.
Travel Expenses of Your Spouse are Otherwise Deductible:
Bringing your non-employee spouse along on a business trip 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 spouse. Your room is probably fully deductible as well. Your meals during the business days of the trip will be deductible - Spouses will not.
For example, when you drive to San Antonio for a conference, you would be deducting the mileage, the hotel and your portion of the meals anyways, so you don't lose that deduction or any portion of it if your spouse goes with you. Do not deduct your spouse's expenses that would not be otherwise deductible by you. So if your spouse rides the river boat, goes to the Alamo, eats lunch on the Riverwalk, plays golf and rides to the top of the Tower, those expenses would not be deductible.
Even if you diligently adhere to your business duties, you still have the evening to spend with your spouse. And if you plan the business vacation properly, you might even have a weekend to spend with your spouse....the topic of next weeks newsletter.
Document, Document, Document
So, where will you take your spouse on your tax deductible vacation? Make sure you spend time with your spouse and enjoy your time together. All work and no play is not a healthy way to live, so enjoy your time with your getaway time with your spouse.
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.