in this video i'm going to be discussing the business deduction related to travel
so when is travel business and when is it personal
i'm going to answer that question as well as these what is included in travel
costs like is airfare included lodging are meals
also included how to structure your travel plan so
that you can get your business trip 100 deducted what happens when you
include personal days as part of your travel plans
can you deduct your spouse or your children's travel costs if they tag
along with you and how many hours per day should you
work to count that day as a business day and
be able to write it off in terms of a business deduction so as you can tell
we have a lot to get to so let's jump into the video so
for those of you who don't know who i am my name is Navi Maraj
i'm a cpa who specializes help in helping real estate professionals so
that's you the real estate agent realtor or broker
but stay tuned if you're just a you know
plain vanilla small business owner this video is going to apply to
you as well so if you've subscribed to the channel then
you know that sort of this video that's discussing travel
is part of the tax planning series that i'm putting out and so we've already
talked about the auto deduction and home office and if you haven't seen those
videos and you're watching this on youtube go
look at my youtube channel and you can watch those videos as well
so what are some examples of business travel
so that could be when you meet with a client it could be meeting with a vendor
it could be a real estate conference for those of my real estate professionals
watching out there it could be training or continuing
education it could even be visiting you know one of your broker's
office in another state or county so all of
that could count as business travel could also be for you
real estate investors out there could also be to purchase
um real estate so not the trips to go just look at the real estate but that
trip that you took to actually purchase the real estate could be deductible um
it could also be working on real estate that you already own so these are all
great examples of what types of trips could be considered
a business trip so what's not business travel
what's not business travel would be as i mentioned kind of earlier looking at
real estate um but you're not going to purchase it
like if you're just shopping if you will uh looking at that real
estate that's not going to be a deductible business expense but if you
actually purchase the transaction then that would be sorry purchase the piece
of real estate rather taking a vacation and answering emails
and calls while there is not going to be a business deduction
okay so i have clients who have another home
that they go to to travel and they just happen to work from there
that's not going to cut it what costs are included
so you could deduct your airfare baggage fees hotel airbnb
rental car the gas for that rental car taxi uh uber tips that you would leave
on for gratuity tolls if you're driving yourself parking
those are just some examples meals count as well
but remember the whole 50 rule where your meals are
50 tax deductible and i've got a separate video on meals and you can
watch that and find that on youtube so how do you structure your trip so
that the whole entire trip is a hundred percent business deduction so behind me
i've got um a couple of scenarios for you so obviously this is you know
wednesday through a tuesday example of a week and i've got three
scenarios so the first scenario is um we've got travel on a wednesday
you're doing business on thursday and friday
and on saturday uh you're traveling back so in this scenario
we've got a hundred percent of the airfare is going to be deductible
100 of the lodging 100 of your travel cost is deductible
50 of the meals that you had on the travel days
and the business days okay the second scenario
is where again we're traveling we're doing business on thursday and friday
saturday is a personal day you're just sightseeing sunday you travel back so in
this example you still take 100 deduction for your
airfare but you're gonna do the math here and
realize you've got one personal day five sort of business days
if you will and therefore you can deduct eighty
percent of your lodging costs and other travel related costs um
fifty 50 of the meals on your travel day and on your business day but none of the
meals on your personal day okay let me give
you you know sort of the trifecta if you
will scenario three so here's where you travel on a
wednesday you do business on thursday or friday
or i should say thursday and friday saturday and sunday
100 personal on monday you have another business trip so you
notice that the weekend is sort of bookended
with business and on tuesday you travel back
so i mentioned it just a second ago but i just want to make sure that you
realize that there's business on the friday and business on the monday
and you didn't just have business on monday for your convenience like
you had to actually transact business on monday to meet with a client or vendor
or maybe a real estate conference was on a friday
and a monday so in this example 100 of the airfare is deductible 100 of
the lodging is deductible um your travel costs you know are
deductible and 50 of the meals for all of these days
including the personal days are deductible so that's a great way
to you know write off as much travel as possible as if you can sort of plan your
trip accordingly can you deduct
spouses or kids who travel with you the answer is yes with a butt and that
butt is they should be employees and
should have a legit you know bona fide reason
for traveling with you related to the business so
an example of that could be you know maybe they're
a teenager and they run all your social media and so they'll be documenting the
trip um they'll be posting on your social
media you know the conference that you're attending
and they're also benefiting from that conference as well
um or if you own real estate in another you know state for example
and they're helping you rehab that property in between tenants that's
another example where you know that child or spouse is
traveling with you and they're doing work with you to rehab that building so
how many hours a day do you need to work on these business days
for it to actually be considered business so there's some rules around
that but you need to work at least four
hours per day for that to be considered business
and the best way that you can you know make note of that or keep track of that
is just to have a log or you know if you use outlook or
whatever calendar app you use make sure it has your travel plans and
it says where you're going if you're attending a seminar or some
continuing education you know the sort of outline of that
seminar or the agenda what ha or what have you
um keep that take a picture of it make sure it's there so
if you're ever audited they know like you had a legit reason to take
this as a business trip for those of you who are wondering
what about if i take a cruise or i go on an international trip
the answer is yes it's possible but there are many exceptions when it comes
to cruises and international trips as well
and it's really beyond the scope of that video if i could talk about that
international trip for probably 30 minutes on its own to get into all the
details and that's sort of outside the scope
here so i'm not going to try talking about cruises or international
trips yes it can be done cruises is really challenging
international trips not as not so challenging but there's a lot of
different rules and nuances that we need to follow so
hopefully that cleared things up for you and that answered your questions related
to business travel and how much of it that
you can deduct and how do you stay within the rules
of the irs to be able to deduct it all that being said
like all of my videos i'm just trying to make you aware of these things in case
your tax professional or tax preparer isn't educating you
about these items if they're not the chance is that you probably should
move on to another accountant but you should consult with your tax
professional and see if they're on board with some of the things that
i'm saying if they're not like i said consult with me or shop another cpa in
your area if you got value out of this video
please do subscribe because as i mentioned
you know this is part of a larger series where i'm going to be teaching you about
different strategies to save thousands dollars of taxes and um in the
next video we're going to be talking about hiring
children okay and that strategy alone could save you
thousands of dollars in taxes and i'm not being sarcastic i'm saying
literally it can save you thousands um so again i appreciate all the comments
all the feedback i appreciate you subscribing um do leave
a comment below if you have a question i'll try to get get to it and answer you
and those comments help me to determine what
other videos i'm going to make because i want the content to be all
about you and your needs so with that said i will see you in the
next video