Maximize Tax Deductions (CONT’D FROM PAGE 30)
end up not getting their higher deduction.” One more thing: Are you planning to use your personal car to travel to the show? If so, you face another decision: Whether to use the standard mileage rate or keep track of your actual expenses. The decision will lie in how good a record keeper you are and how much hassle you want to put up with. Sometimes the standard deduction is the What if you spend some vacation or personal time during your trip? How does that affect the deductibility of your expenses? An excerpt from IRS document 463 pro- vides some clarification: “You can deduct all of your travel expenses if your trip was entirely business-related. If your trip was primarily for business and, while at your business destination, you extended your stay for a vacation, made a easier option. Personal Time
personal side trip, or had other personal activities, you can deduct only your business-related travel expenses.” It’s important to keep careful records about your jour-
ney, allocating correctly between business and personal time. “My tip is to be truthful,” says Catherine Raker, an accountant with Cend- rowski Corporate Advisors, Chicago ( cca-advi- sors.com ). “If it’s really a personal trip and you do some business-related activities don’t write the whole trip off as a business expense.” Expenses that are shared for business and vacation can fall into a grey area, according to Cawley. “Your airline fare might be disallowed if you spend two days of your trip on business and five days on vacation. On the other hand, your hotel bill for the specific two business days, and other expenses for the business portion of your trip, would still be deductible.” Personal time often means the presence of a spouse—and expenses related to that indi- vidual’s travel can complicate record keeping. Ordinarily such expenses must be separated from those of the business traveler and may not be deducted. There is one exception: “If you are traveling with your spouse who is par- ticipating for a genuine business reason in the event, then that individual’s expenses are cov- ered,” says Flemming. Keeping Track Trade shows can be valuable resources for your business. By bringing together vendors and buyers in one place, they facilitate more buying activity and higher profits. Taking the time to document your activity when you travel to a show can help alleviate the costly impact travel and hotel expenses can have on your bottom line. “It can be hard to keep careful records when you are busy, but those records do help come income tax time,” says Cawley. “Tracking your travel expenses when you attend a trade show can really pay off.”
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August 2, 2021
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