To deduct a vacation as business travel, plan it with a documented business purpose before booking, like visiting clients or scouting locations. More than 50% of days must be business-related. Spouse and kids' airfare aren't deductible unless they're W-2 employees; meals are deductible, but entertainment like theme parks isn't.
How do I have business trips? Um, I am rewording the question and I'll tell you why. If you're audited, you need to be able to prove your trip had business purpose before you did all the work of scheduling the trip. Um, so the original question was, how— I have a personal trip coming up, how do I make my personal trip business. If you're audited and you have all this personal trip stuff already scheduled and planned out, um, before you decided to be business, the IRS is going to say that is not a business trip. So the predetermined purpose of the trip must be business, and you need to be able to prove that if you're audited. So let's say, you know, I live in Utah, um, and let's say I would like to go to Southern California for business. Um, that could be a variety of reasons, but you just have to have business purpose. From— for my case, I could be expanding Insight Tax. I could be going to a gym location, uh, to become more of an expert and provide some content to our gym clients. I be going to any, uh, business down there and, and do the same thing. We have clients in Southern California. I could be visiting them. Um, all of those, those are just a few examples of why that could be a business trip. So let's say that's the reason and that's why I'm going to go. So maybe then to prove it, I would want to have an email that I sent to, um, someone who's maybe selling commercial space. Or another accountant that lives down there where I'm emailing and saying, hey, I'd love to come visit you and learn more about your operations in Southern California. That would be proof if the IRS asked that I did that. Now that I have that, I can go, I can book. It could be airfare. It could be a hotel stay. But let's say I decide to take my kids with me, my whole family. Wife and kids. And while I'm down there, maybe we go to Disneyland. Now, entertainment as an expense is not a business tax deduction anymore as of 2018. But it doesn't mean that the days I'm down there aren't considered business, and I can't write off the stay at my hotel. If I drive with my family, the gas— because I would have spent that gas if I had driven down. From an airfare standpoint, if I buy tickets for my kids, I cannot write those off unless they're paid as an employee for my business. Same with my spouse. If she's an employee of the business, I can write that off. If they're not employees, then I can't write off their airfare. The hotel room. If I— if they're not part of the business and employees, I can write off the single occupancy rate of the hotel stay. The hotels have that, you just have to ask the front desk for it. But if the family is part of the company and they're W-2, then— and getting a payroll, then I could write off the whole thing. Um, while I'm down there on my business trip, any food I consume is automatically considered business purpose, and so I could write that off under business meals. Um, it's important to note that more than 50% of your days on the trip need to be business in order for it to be considered a business trip. And if Friday has business purpose and Monday has business purpose, then the weekend automatically gets credited as business purpose. The days you're actually traveling are considered business purpose. Um, and anyway, so that's how you write off a trip to make it business. I just want to reiterate, if you're audited, you have to be able to prove you had business purpose to the trip before you took the trip. If I booked everything as a family, a whole Disneyland vacation trip, and I'm like, oh, in hindsight, how do I make this business? And I can't prove that, then I'm not— I'm going to miss out on those deductions. I'm not going to be able to take them. Hope that helps. That was a quick tax tip. Remember, profitability is a choice. Have the courage and wisdom to choose it.
