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Beth A. Botti, CFP®, ChFC, CLU, CDFA™
Financial Consultant
California Insurance License #0G24537
612 Wheelers Farms Road, Milford, CT 06460
Phone: 203-877-6556 Ext. 169
Fax: 203-301-0736
Email: beth.botti@equitable.com
July/August 2020
Combining Personal and Business Travel
If you run your own company and travel for business, you may be tempted to combine work with pleasure. That's okay, as long as you don't trip up on the tax rules. Your tax professional can advise you as to what you can or cannot do.
Tax-Smart Travel
Business owners know that travel expenses related to work can offer significant tax deductions. Generally, businesses can deduct the cost of airfare, lodging, car rentals and meals from taxable income when used for legitimate business purposes.When you combine personal and business travel, it gets a little more complicated. You can still deduct transportation costs for you, but not for any family traveling with you who don’t have a business reason to take the trip.
Also, you may only deduct the reasonable cost of lodging, which in this case would be single or double occupancy instead of a suite. You may also deduct the cost of shipping materials needed for business, your dry cleaning and even tips. You can’t, however, deduct a family golf outing, tennis lessons or massage.
Separate Expenses
It’s important to keep detailed records, with the days, locations, time involved, names of people you meet and your purpose of business. Know that the IRS won’t likely allow deductions for a day when you have a 15-minute meeting and spend the rest of the day with your family at a theme park.You will have to allocate all of your expenses for tax purposes. For example, you may deduct the cost (including gas) of renting a car only during those days when conducting business. So, if you spend $500 for a 10-day rental and you put in five days for business, you deduct half of that as a business expense.
Finally, you will have to recognize the personal expenses paid by the company as an owner’s draw and part of your income.
Be Prepared
As with any travel, hope for the best and prepare for the worst. If you have a small travel-date window and live in an area with frequent airline delays and cancellations, consider travel insurance, and make sure you have the appropriate health insurance if traveling overseas.GE-2917467 (1/20) (Exp. 1/22)
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Duly registered and licensed financial professionals offer securities through Equitable Advisors, LLC (NY, NY 212-314-4600), member FINRA,SIPC (Equitable Financial Advisors in MI & TN), offer investment advisory products and services through Equitable Advisors, LLC, an SEC-registered investment advisor, and offer annuity and insurance products through Equitable Network, LLC (Equitable Network Insurance Agency of Utah, LLC in UT; Equitable Network of Puerto Rico, Inc.). Equal Opportunity Employer - M/F/D/V. Equitable Advisors and its associates and affiliates do not provide tax, accounting, or legal advice or services. Representatives may transact business, which includes offering products and services and/or responding to inquiries, only in state(s) in which they are properly registered and/or licensed. Your connection to this website does not necessarily indicate that the sender is able to transact business in your state. The information in this website is not investment or securities advice and does not constitute an offer. For more information about Equitable Advisors, LLC you may visit https://equitable.com/crs to review the firm's Relationship Summary for Retail Investors and General Conflicts of Interest Disclosure.
GE-6572038.1 (4/24)(Exp. 4/26)
CFP®, and CERTIFIED FINANCIAL PLANNER™ are certification marks owned by the Certified Financial Planner Board of Standards, Inc. These marks are awarded to individuals who successfully complete the CFP Board's initial and ongoing certification requirements.
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