Tax-smart domestic travel: Combining business with pleasure

Summer is just around the corner, so you might be thinking about getting some vacation time. If you’re self-employed or a business owner, you have a golden opportunity to combine a business trip with a few extra days of vacation and offset some of the cost with a tax deduction. But be careful, or you might not qualify for the write-offs you’re expecting.

Basic rules

Business travel expenses can potentially be deducted if the travel is within the United States and the expenses are:

  • “Ordinary and necessary” and
  • Directly related to the business.

Note: The tax rules for foreign business travel are different from those for domestic travel.

Business owners and the self-employed are generally eligible to deduct business travel expenses if they meet the tests described above. However, under the Tax Cuts and Jobs Act, employees can no longer deduct such expenses. The potential deductions discussed in this article assume that you’re a business owner or self-employed.

A business-vacation trip

Transportation costs to and from the location of your business activity may be 100% deductible if the primary reason for the trip is business rather than pleasure. But if vacation is the primary reason for your travel, generally no transportation costs are deductible. These costs include plane or train tickets, the cost of getting to and from the airport, luggage handling tips and car expenses if you drive. Costs for driving your personal car are also eligible.

The key factor in determining whether the primary reason for domestic travel is business is the number of days you spend conducting business vs. enjoying vacation days. Any day principally devoted to business activities during normal business hours counts as a business day. In addition:

  • Your travel days count as business days, as do weekends and holidays — if they fall between days devoted to business and it wouldn’t be practical to return home.
  • Standby days (days when your physical presence might be required) also count as business days, even if you aren’t ultimately called upon to work on those days.

Bottom line: If your business days exceed your personal days, you should be able to claim business was the primary reason for a domestic trip and deduct your transportation costs.

What else can you deduct?

Once at the destination, your out-of-pocket expenses for business days are fully deductible. Examples of these expenses include lodging, meals (subject to the 50% disallowance rule), seminar and convention fees, and cab fare. Expenses for personal days aren’t deductible.

Keep in mind that only expenses for yourself are deductible. You can’t deduct expenses for family members traveling with you, including your spouse — unless they’re employees of your business and traveling for a bona fide business purpose.

Keep good records

Be sure to retain proof of the business nature of your trip. You must properly substantiate all of the expenses you’re deducting. If you get audited, the IRS will want to see records during travel you claim was for business. Good records are your best defense. Additional rules and limits apply to travel expense deductions. Please contact us if you have questions.

PRESS RELEASE: Paul Glantz, CPA Appointed to Intuit’s Accountant Council

PRESS RELEASE


Contacts:           

Paul Glantz, CPA
Launch Consulting, Inc
512-666-0729
Paul@launchconsultinginc.com

Kim Amsbaugh, Intuit, Inc
650-944-6649
kim_amsbaugh@intuit.com

Paul Glantz, CPA Appointed to Intuit’s Accountant Council

Select Panel Advises on Products and Services that Accountants and Their Clients Want Most

            AUSTIN, TX – June 3, 2019 – Today, Intuit, Inc (Nasdaq: INTU) announced that Paul Glantz, CPA has been named to the company’s U.S. Accountant Council advisory board. Intuit’s mission is to power prosperity around the world, and it accomplishes this through its innovative ecosystem of financial management solutions that serve more than 50 million accounting professionals, small businesses and consumers worldwide.

As President of Launch Consulting, Inc., Glantz is one of 16 council members who will share their insights, experience and expertise to help Intuit develop new products and services for accounting professionals and small businesses worldwide. Glantz has more than 10 years of experience in providing advisory and accounting services that help small businesses thrive.

“We are excited to have Paul on our Council,” said Ariege Misherghi, leader of the Accountant Segment, Small Business and Self-Employed Group at Intuit. “As an accounting professional who embraces new technology and forward-thinking practices, Paul will be a critical member of our advisory board. He will be instrumental in helping us develop, enhance and deliver products and services that meet the needs of accounting professionals across the globe, ultimately allowing them to better serve their small business and self-employed clients.”

Glantz said he is looking forward to participating on council, “I’m honored and excited to be a part of this council. This is an opportunity for Launch Consulting to drive innovation for the future of accounting and the next generation of Intuit products. As an innovative CPA with a growing client base, I’ve immersed myself in becoming an expert in cloud-based accounting solutions and industry best practices, always putting the needs of our clients first. QuickBooks Online is a great solution for the entrepreneurs, technology businesses, and start-ups for which Launch Consulting provides strategic tax guidance and virtual accounting services. I hope that my contribution to this council helps drive product innovation at Intuit, providing valuable feedback addressing real world customer needs.”

Intuit’s Accountant Council meets periodically at Intuit’s Silicon Valley headquarters to get an inside look at the company’s strategy and product development. Members participate for up to two years, sharing their thoughts and insights on critical accountant and small business tools.

About Intuit Inc.

Intuit’s mission is to Power Prosperity Around the World. Our global products and platforms, including TurboTaxQuickBooksMint and Turbo, are designed to empower consumers, self-employed and small businesses to improve their financial lives, finding them more money with the least amount of work, while giving them complete confidence in their actions and decisions. Our innovative ecosystem of financial management solutions serves approximately 50 million customers worldwide, unleashing the power of many for the prosperity of one. Please visit us for the latest news and in-depth information about Intuit and its brands and find us on social.

Taxpayers should include tax plans in their wedding plans

Couples getting married this year know there are a lot of details in planning a wedding. Along with the cake and gift registry, their first tax return as a married couple should be on their checklist. The IRS has tips and tools to help newlyweds consider how marriage may affect their taxes.

Here are five simple steps that can make filing their first tax return as newlyweds less stressful.

Step 1: Taxpayers should check their withholding at the beginning of each year, or when their personal circumstances change — like after getting married. Using the IRS Withholding Calculator is a good way for taxpayers to check their withholding. Taxpayers who need to change their withholding should complete and submit a new Form W-4, Employee’s Withholding Allowance Certificate, to their employer.

Step 2: Marriage may mean a change in name. If either – or both – of the newlyweds legally change their name, it’s important to report that change to the Social Security Administration. The names on the taxpayers’ tax return must match the names on file at the SSA. If it doesn’t, it could delay any refund.

Step 3: If a marriage means a change in address, the IRS and the U.S. Postal Service need to know. Newlyweds can file Form 8822, Change of Address, to update their mailing address with the IRS. They should notify the postal service to forward their mail by going online at USPS.com or by visiting their local post office.

Step 4: Taxpayers who receive advance payments of the premium tax credit should report changes in circumstances to their Health Insurance Marketplace as they happen. Certain changes to household, income or family size may affect the amount of the premium tax credit. This can affect a tax refund or the amount of tax owed. Taxpayers should also notify the Marketplace when they move out of the area covered by their current Marketplace plan.

Step 5: Newlyweds should consider their filing status. A taxpayer’s marital status on December 31 determines whether they’re considered married for that full year. Generally, the tax law allows married couples to file their federal income tax return either jointly or separately in any given year. Taxpayers can use the Interactive Tax Assistant to determine which status is best for them.

Source: IRS Tax Tip 2019-68