Writing Off the Family Vacation

Writing Off the Family Vacation
Eva Rosenberg, EA

Ever since I heard about the Harry Potter village at Universal Orlando, I’ve wanted to go there. But Orlando is an expensive place, especially if you want to be anywhere near the main attractions.

How could I make this a tax-deductible trip? I could go to an IRS Tax Forum in July.

Practically every industry has courses, seminars, workshops, trade shows, or other events taking place in desirable vacation spots. Look at how Las Vegas, a common location for industry conferences and trade shows, has morphed into a family town. It provides unlimited entertainment and services for children.

Deducting Your Travel Expenses

Bringing your spouse and children along to a business conference or trade show can cost very little. For instance, if you drive, it will cost you nothing extra to bring your whole family—as long as you all fit into one car and one hotel room. While your room is probably fully deductible, don’t deduct any extra fees for cots, resort fees for the family, or the kids’ room service. Your meals during the business days of the trip will be deductible—theirs will not.

Note: If a double room costs more than a single room, you may only deduct the cost of the single room. However, employees have the option of using the IRS per diem rates for lodging. Often, these will be higher than the fee you paid for the room. Just remember that if you use per diem rates for one trip during the year, you must use them for all trips during the year.

Even if you diligently adhere to your business duties, you’ll likely have the evenings to spend with your family. And if you plan the business vacation properly, you might even have a weekend at the beginning or the end to spend with them. For instance, if the event starts on a Monday, you can arrive the Saturday before and perhaps arrange to meet with colleagues for an hour or two on Saturday and/or Sunday.

Deducting the Family, Too

If your children and your spouse actively work in your business, you can deduct their expenses as well. But they have to be working during your event or registered to take courses with you.

Think of them as you would any employee who comes along to a conference or trade show. At a conference, they have duties to perform, courses to attend, continuing education to earn. At a trade show, they should be working your booth, named in your brochures, and picking up contacts or clients or customers for later follow-up.

For instance, I used to attend an affiliate marketing conference each year. Tony Fiore, another attendee, would bring his entire family to the conferences in the Bahamas. He was a speaker at the event and a sponsor with a booth. His family worked the booth, and they also did something special. Each year, they would set up a scavenger hunt where conference attendees could win prizes. The family worked. They had fun. And everyone at the event knew the Fiores.

Eva Rosenberg, EA, is the publisher of TaxMama.com®, where your tax questions are answered. She teaches tax professionals how to represent you when you have tax problems. She is the author of several books and e-books, including Small Business Taxes Made Easy. Follow her on Twitter: @TaxMama