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How to Turn Your Summer Vacation Into a Tax Deduction

Audio version available here (1 min. 45 sec.)

With summertime comes a summer vacation, and you may be able to turn a relaxing week off into a significant tax deduction. This can be done by deducting the travel and living expenses of your trip on your next tax return, but first you have to justify the trip for business. Working while you are supposed to be on vacation might sound backwards, but the hundreds to thousands of dollars you could save speaks for itself.

Business owners know that just about any sort of business travel can count as a deductible expense, but just how far can you push it? Pretty far, actually, so you could justify your luxury beach getaway as a business trip—if you follow some important rules:

  1. Profit Motive- Your business trip should be conceived as a venture to make money.

  2. Overnight- A day trip won’t count. You need to stay at least one night at your destination.

  3. Business vs Personal- Does the business purpose (and time) of the trip outweigh the personal? If not, you may run into trouble during an audit.

  4. Diligent Recordkeeping- It is vital to keep records of all expenses, and their reasons.

Most people jump to conventions and seminars as a trip that can be deducted. This is true, but you don’t have to be limited to this scenario when looking to double book a vacation and business trip. As long as you follow the rules above, you should be able to justify the deduction to the IRS.

But this doesn’t mean that you should go ahead and deduct the entirety of your two-week stay at a resort in Cancun. Unless you can reasonably justify a trip of this nature as advancing your business’s profitability, and have the receipts to back it up, you are better off not goading the IRS into an audit.

Still, this strategy can be a great method to save a few hundred (or thousand) dollars on your tax return. If you are motivated to try the strategy for yourself, we highly recommend involving a tax professional to guide you. Don’t have one you can easily reach? Give XQ CPA a call, or schedule a meeting online. Our tax team would be happy to work with you.

Phone: 832-295-3353

Want to pay less taxes? Read XQ CPA's official tax planning guidebook! How to Grow Your Wealth Through Tax Planning.

Young business owner couple takes a selfie in a tropical resort.


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