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Travel for business but also for personal reasons

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  • Travel for business but also for personal reasons

    If I travel from my home to another state (in the U.S. - via air) and stay in a relative home for 2 weeks, during which I visit my relatives, but also work 4 days as independent contractor at a local facility, can I deduct the full airfare+airport transport to my relative home-given that I do IC work for 4 days- as a business expense or should all this be somehow be prorated?

     

  • #2
    I would claim the whole enchilada; to be safe, it would probably be best if those days are spread out.

    Danut15, based on the string of posts that you have started, I must ask:  Are you an IRS auditor trying to round up cases?

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    • #3
      I wish :-).
      I am a physician who has been doing lots of IC work over past few years and started doing my own taxes in the end, once I learnt most of the lingo. With some recent changes in my ventures, new questions came out and prefer sorting them ahead of the tax season.

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      • #4
        You should be able to deduct your travel expenses...you still needed to travel in order to do the work.

        You can'd deduct something you didn't spend, though, so don't try to deduct lodging expenses when you crashed for free.

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        • #5
          Can you deduct travel expenses if your hospital paid for the trip?  IE later reimbursed you.  I suspect not....

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          • #6




            Can you deduct travel expenses if your hospital paid for the trip?  IE later reimbursed you.  I suspect not….
            Click to expand...


             

            If reimbursed you cannot deduct the expenses. However, the reimbursement should not be taxed.

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            • #7
              Trying to decide if I would do what some Trump admin cabinet members are being chastised for. Guess I won't ever claim my spouse needs to travel with me for my business purposes, though he's also a doc so might try to have him do same conference etc. I always figured it's a bit of a scam to have my conference somewhere lovely, but that's just business perks, so if I go, I can claim the days worked, and hotel rooms and travel to cover those days, ethically. As well as no qualms about paying on my own for extra hotel days or rooms and travel for family. Conferences with am meetings and pm no schedule seem dodgey to me, though, and I never need an airplane with secure phone on standby the whole trip. Always toy with having the inlaws charge us rent when we do a meeting in their town but have never tried that gambit.

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              • #8
                You can deduct the travel expenses along with any other business related expenses incurred. The same thing applies when traveling with your family.

                Only one of the airfares will be deductible, but the usual rental car, hotel, meals (1 person pro rata), etc. are also deductible. Same idea if you drive since the per mileage rate doesn't care how many people are in the car with you. Basically, you can deduct what you would have spent individually on travel regardless of any additional people that came on the same trip. It just happens to be your family.

                Someone mentioned above you can only deduct what's actually spent. That's generally true. However, you always have the option to take a flat-rate per diem for travel which doesn't require any documentation or receipts. The IRS specifies some areas as "high cost" which provide a much higher deductible per diem. It's usually not worthwhile since actual spending is higher than the per diem, but often makes sense for free lodging.

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                • #9




                  If I travel from my home to another state (in the U.S. – via air) and stay in a relative home for 2 weeks, during which I visit my relatives, but also work 4 days as independent contractor at a local facility, can I deduct the full airfare+airport transport to my relative home-given that I do IC work for 4 days- as a business expense or should all this be somehow be prorated?
                  Click to expand...


                  I would deduct it and, as csciora mentioned, take the per diem for those 4 days (food and lodging). Any extras you paid for the other 10 days would not be deductible, but if you take your relatives out to eat while you're there as a thank-you, buy them groceries, etc., I'd deduct that, too.

                  btw, if you actually pay them for staying with them, they do not have to claim the income. Income received for renting out your home for < 15 days/year does not have to be reported to the IRS.
                  Working to protect good doctors from bad advisors. Fox & Co CPAs, Fox & Co Wealth Mgmt. 270-247-6087

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                  • #10
                    Here's one aspect; after reading Sandy Botkin, Cpa book: Lower Your Taxews Big Time, on page 30 (2015 edition), he has a chart in regards to figuring out whether one can deduct the "transportation"-in this case airfare, to a business location, which has separate rules than the "on the go expenses-the accomodation/food for the business days" (which one can deduct anyhow on those business days).

                    His chart states that if traveling for business in the U.S., but the trip combines business and personal travel, then the number of business travel days must be >50% of the travel days spent at that destination, in order to deduct the transportation fare. You could still deduct the accomodation/per diem/food...etc. no matter how many business days you have, but not transportation cost, if the business days are less than 50% of the total days in that trip.

                     

                    Any thoughts or updates on this? The book I have is from 2015.

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                    • #11


                      Any thoughts or updates on this? The book I have is from 2015.
                      Click to expand...


                      That's one way to look at it but I think a not always applicable rule of thumb. In Topic Number: 511 - Business Travel Expenses, the IRS says "You're traveling away from home if your duties require you to be away from the general area of your tax home for a period substantially longer than an ordinary day's work, and you need to get sleep or rest to meet the demands of your work while away." How I would evaluate this trip is that the travel costs to and from would be deductible if you arranged the trip for business purposes and decided to take advantage of the time to be with family. iow, would you have taken this trip if you didn't have the IC work?

                      • If yes and you decided to do some IC work to justify it, then it's not deductible.

                      • If no and you decided to spend time with family b/c you were already there, then it's deductible.

                      Working to protect good doctors from bad advisors. Fox & Co CPAs, Fox & Co Wealth Mgmt. 270-247-6087

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                      • #12
                        Interesting post. I went for a work-related conference recently and my spouse came along as it was our 12th wedding anniversary the same weekend. I am planning on writing off my air ticket, hotel and car rental, and kept all the meal receipts to pro-rate it. I also had a business dinner meeting with a few associates/business networking, and was informed I could write that off as well by my CPA.

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