I recently co-wrote my first book, Introduction to Tax Laws for Amazon Sellers. While this may not make me a tax “expert,” it does mean that I field tons of questions every day about tax laws and tax write-offs, and how they pertain to people’s businesses.
The question I’ve seen come up the most lately would have to be the title of this article. People want to know if there is any way they can use their vacation expenses as tax write-offs, if they work while they are on vacation. It makes sense since summer is ending, and tax season is just around the corner.
So let’s look at this question from a few different angles.
Can I deduct my vacation?
Unfortunately, the simplest, most direct answer to that question is no. It all comes down to what the Internal Revenue Service refers to as “intent.”
Article 463, which is the IRS ruling on business travel, entertainment, gift and car expenses, states that “For tax purposes, travel expenses are the ordinary and necessary expenses of traveling away from home for your business, profession, or job.”
If your main goal is to take a vacation, then it falls under the category of just that—a vacation—and there is no way to make your vacation expenses qualify as tax write-offs.
Are you saying I can’t deduct my vacation?
Well, maybe. There is a possibility that you can deduct certain expenses if the “intent” of your trip is both business and vacation.
For example: A businesswoman takes her family on a trip to Walt Disney World. They make the (very costly) trip down to Florida. For the first two days, the family vacations while the businesswoman attends an eBay conference nearby. After the conference, she goes on to the parks and spends the rest of the time vacationing with their family.
Because they had a conference at the start of the trip, they are able to deduct the cost of the trip to Florida, their expenses the day of the conference and the trip back home. Obviously, the tickets to the parks and all the money spent after the conference can’t be uses as tax write-offs… but we will take what we can get.
So, I can deduct some of my vacation?
In some cases, yes! In rare cases, you may be able to declare the expenses from the entire trip as tax write-offs.
I have some friends who recently took a trip up and down the East Coast and managed to do just that. How, you ask? They have an RV and the main “intent” of the trip was to source inventory for the Christmas selling season. They stopped at every Target and Walmart along the way, sourcing things and buying inventory (making sure to keep their receipts).
Once they got to Manhattan, they stayed for the weekend with some old friends. They got to see their friends, sightsee and have fun. When they were through, they hopped back in their RV to head home, making sure to source more inventories on the way back.
Their entire trip was covered! This is a prime example of how to bend the rules about tax write-offs to make them work for you. It isn’t possible to make every trip deductible—and what would be the fun in using all of your vacations to work, anyway? But it can be done.
What could be better than a trip that can be completely written off? Only one where all expenses were paid. Unfortunately, I haven’t figured out a way to accomplish that yet, but a girl can dream.
Below, I’ve included a chart of tax write-offs, so you know what to keep track of on your next “business vacation.” But remember to keep your receipts.