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May 23, 2001 -
There’s
a reason that every industry under the sun holds conferences at right about this
time of year. Sure it’s time for the International
Society
of Hair Weavers to get together – and even better that the conference
is being held on a ship cruising along the coast of Italy.
Everyone’s
going to want to go to that, right? Better yet, bring the whole family! You can
take a vacation – and write it off on your taxes!
Right?
Think again, says Millian.
“It’s
so important to know the rules about travel and meal deductions when it comes to
combining vacations and conferences,” she says.
Before
you book all your tickets and rooms, consider this:
“It’s
nearly impossible to deduct travel related to conferences that are held
out-of-the-continental U.S.,” Millian says. “To do it you have to show that
the conference couldn't have been given anywhere else.”
That’s
why the travel costs for conferences held on cruise ships usually don’t count
towards your deductions, but you can still deduct the fee for the conference
itself and the deduction for the cruise is limited. Ironically, as a Certified
Public Accountant, Millian herself will receive offers in the mail to
cruise-based conferences for accountants that imply they are deductible.
“You’d think they’d realize we (accountants) know better!”
If
you are traveling in the United States – it’s a whole other ball game –
but you still need to be careful about which expenses are deductible and which
are not.
“In
order to deduct the travel to and from the place you’re visiting, the main
purpose of your trip has to be the conference,” she says.
Let’s
say you’re taking the family with you to a conference in California. If you
decide to take a side trip to Disneyland for a day. “You better make sure the
conference time was more than 75 percent of the total days away,” Millian
says.
In
other words, you don’t want the length of your vacation to exceed the length
of the conference. If you get audited and have deducted related expenses,
they’ll be suspect if your conference ended on a Friday and you didn’t come
home until the following Tuesday. Anything that you deducted that was spent on
Saturday through Monday just doesn’t qualify. Just Saturday could be okay if
its under 25 percent of the total time, however.
So
here’s the basics -- if you take the family to California with you and you
stay at a hotel, you can deduct the cost of your air fare, but not your
family’s. If you decide to drive, all the mileage is deductible. Once you get
there and check into the hotel, the cost of the hotel room is deductible at the
single rate versus the family rate.
“Of
course, if your spouse is in the same business, then the whole thing is
deductible -- assuming kids are free.”
As
far as meals go, their deductible at 50% as long as they are conference-related,
but only for yourself, or your spouse if he or she is also attending the
conference.
But
it’s the incidentals that a lot of people forget to deduct. Taxi cab fares,
tips for luggage people, bellhops, etc., airport parking and mileage to the
airport are just a few.”
“They’re
small things, but they can really add up,” Millian says. “Especially if you
travel a lot.”
Your
bet bet is to talk to your tax advisor about how much is tax deductible before
you commit to a conference/vacation.
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