DEDUCT YOUR VACATION BILL WALSTON
Per Diem Method: The IRS allows for a set
deduction per day when you travel. Every year, the
IRS publishes a table (IRS Publication 1542) which
specifies a per diem value depending on your
destination. There is an amount specified for both
lodging and meals and incidentals. Even if you
spend less than your per diem rate, you can still take
the entire per diem deduction. What I love about this
method is that it doesn’t require receipts. You only
need to document where you were! Imagine the
transportation expenses and “on the road” expenses.
possibilities. One caveat: Sole proprietorships are
Many people combine these under one set of rules.
not allowed to use the per diem method for their
However, they are treated differently; each category
lodging deductions. However, all other expense are
has its own separate rule base. What are the
fair game as far as per diems go.
differences? Transportation expenses are those costs
that you incur in getting to and from your destination.
Actual
Expense
Method:
This
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So the cost of your airfare or car costs would come
straightforward. Simply keep all of your receipts and
under that category. If the business days of your trip
add up the total amount of deductions based on
exceed the non-business days the assumption is that
what you have spent. The important thing is to make
your trip is primarily for business and all of your
sure you keep the receipts for everything you spend
transportation costs are deductible. If non-business
your money on.
days exceed business days then none of the
transportation costs are deductible, even though you
may be able to deduct “on the road” expenses.
Deduct Expenses for Your Spouse or
Significant Other
The “on the road expenses” include all costs
necessary to sustain life while on your trip. These
If you want to take trips with your spouse or
expenses
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