Adding vacation time to a business trip

If your spouse and/or family joins you from the beginning of the trip and they have no business function, separate the incremental expenses they accumulate from your own, said Tom Ochsenschlager, vice president of taxation for the American Institute of Certified Public Accountants. Those extra fees may include charges for extra people in a taxi or the price of meals eaten with you.

Among those who pay for their own business travel — for example, people who are self-employed or doing independent research for work — Ochsenschlager said the most common mistake occurs when he or she assumes the trip is 100 percent tax-deductible because it had a business component to it.

In reality, if the majority of a trip is for pleasure, the business expenses you incurred would be deductible, while the transportation cost would not, Ochsenschlager said.

But if you spend the majority of your stay involved in business, both your transportation costs and business expenses would be tax deductible, he said.

The rules change a bit when you travel for business abroad and stick around for some leisure time.

In many cases, even if most of your trip is for business, a portion of the transportation cost is not deductible, Ochsenschlager said. However, if you’re there for less than a week and most of the trip is for business your transportation cost is deductible, he said.

Whitehead says that separating her personal expenses from client expenses is a major priority, and it’s worth the extra effort.

She is hopeful her upcoming business event in Monte Carlo, Monaco, will turn into a much-needed vacation. “By the time I finish that program, I will want a vacation, because I’ll be very tired. So I’ll be someplace then where I can actually stay and enjoy it.”

Claiming Deductions

The last thing you want to come out of your business-trip-turned-vacation is skepticism from the IRS. For those paying for their travel, Tom Ochsenschlager, vice president of taxation at the American Institute of Certified Public Accountants shares these rules on deductions:

• If your domestic trip is primarily business, both business expenses and the price of getting to and from the destination are deductible.
• If it’s primarily pleasure, your transportation to and from the destination is not deductible.
• If you spend less on transportation by staying until Saturday, the IRS has indicated that it will generally consider the extra time spent as a business expense.
• Meals are only 50 percent deductible, even if they’re business.
• In most cases, if you bring your spouse or other guests, the costs they incur are not deductible.
• In most cases of foreign travel, if there’s any pleasure element, a portion of the transportation cost is not deductible, but if the trip is less than a week, it is.
• Foreign travel transportation cost is also deductible if less than 25 percent is spent in a non-business activity or if the traveler had no substantial control over arranging the trip.