If you travel regularly for business, there may be times when you decide to bring the family along. After satisfying your work commitments, you have the opportunity to enjoy some quality family time even when you’re on the road, and, as an added bonus, a portion of your vacation might lower your tax liability.
While you can’t get a tax deduction for a personal vacation, you may be eligible for certain federal tax deductions if you make business a part of your trip.
What is tax deductible when traveling for business?
If you simply spend a couple of hours working on your laptop and the rest of the time by the pool or sitting in your hotel room, don’t expect to receive a tax deduction. In order for an expense to be considered a legitimate tax deduction, it must be associated to a business-related activity that could not otherwise be done at home.
One year, I combined a trip to see my in-laws with a business conference. We planned the trip so that my son could spend a week with his grandparents and they could babysit him while I was working. In the end, because the primary reason for my trip was business-related, I was able to deduct from my federal taxes the cost of my round-trip plane ticket and the cost of my hotel for the three days.
Document business activities and separate them from family expenses
It’s important to understand that you can’t take a tax deduction for your family’s travel expenses—only your own. While your family members can stay in your hotel room, you can’t deduct the nights that you aren’t there for business.
In addition, keep in mind that if you go to a three-day conference, but you stay four additional days, you can’t deduct the cost of those four non-conference days on your tax return.
While you may be able to mix business with pleasure, be sure to consult tax resources to understand what’s deductible and what’s not. For a complete list of approved expenses for both business and personal travel, click here.
Miranda Marquit is a freelance journalist specializing in financial topics. Read more of her writing on Huffington Post, Wise Bread, AllBusiness, and at her website, Planting Money Seeds.