Introduction –
Business trip is something that many people take and now, business persons want to know about writing-off a vacation as a business trip. Now, every vacation or a trip that you take cannot be added as a business trip, especially when there are tax deductions involved. As per the IRS, there are certain rules, that you have to follow, which will make you eligible for tax deductions on business trip. You can also see here more on, how to write off a vacation as a business trip & broaden your horizons on the same. There are some ways or steps that you can take, which will qualify your travel as a business trip. Let’s delve into it further.
What Qualifies as a Business Trip as Per IRS –
There are certain criteria that you need to follow to qualify your trip as a business trip. The first and the foremost criteria is that, you should go on a business trip or a location, which is outside your tax state or home. For instance, you stay in Minnesota and are paying tax there, so you cannot go on a business trip in or within Minnesota like in Minneapolis and claim tax on business trip. You need to leave your home tax state. If you go to Florida for a business trip, then you can claim tax deductions for your business trip.
Trip Consisting of Business –
The next thing that the IRS will measure is the number days that you are on the trip. For your trip to qualify as a business trip, you should spend your number of days, in business trip, and the trip should mainly consist of business. For instance, you go for a 7-day business trip, in which you spend 5-days spending time with business partners and 3-days you spend your time on the beach, then it will qualify as a business trip. But if you go for a 6-day business trip, spend 4 days on the beach and 2 days with your business partner, then that’s a vacation, and not a business trip.
How the Business Trip Should Be –
Another important thing, that you should know is that your business trip should be, ordinary and necessary. The IRS has designated that your business trip expenses should be, ‘ordinary & necessary’. It should be necessary for the sake of carrying out the plain business activity. Also, you should know that the writing-off is a difficult thing, because the IRS will discover and investigate about the expenses that you have claimed. And, in case if the IRS found out that, the expenses which you have claimed is not necessary, then you could even face serious penalties. The next rule is that, you should plan your business trip in advance and also, submit the papers related to it.
