20.11 Business-Vacation Trips Within the United States

On a business trip to a resort area, you may also spend time vacationing. If the primary purpose of the trip is to transact business and the area is within the United States (50 states and the District of Columbia) you may deduct all of the costs of your transportation to and from the area, lodging, and 50% of meal expenses, even if you do spend time vacationing. If the main purpose of the trip is personal, you may not deduct any part of your travel costs to and from the area. The amount of time spent on business as opposed to sightseeing or personal visits is the most important issue in determining your primary purpose. Regardless of the primary purpose of your trip, you are allowed to deduct expenses related to the business you transacted while in the area.

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image Caution
Primary Business Purpose
If your return is examined, proving the business purpose of your trip depends on presenting evidence to convince an examining agent that the trip, despite your vacationing, was planned primarily to transact business. Keep a log or diary to substantiate business activities.
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No deductions will be allowed if you attend a convention or seminar where you are given videotapes to view at your own convenience and no other business-related activities or lectures occur during the convention. The trip is considered a vacation.

If your trip is primarily for business, and while at the business destination you extend your stay for a few days for nonbusiness reasons, such as to visit relatives, you deduct travel expenses to and from the business destination.

EXAMPLE
You work in Atlanta and make a business trip to New Orleans. You stay in New Orleans for six days and your total costs, including round-trip transportation to and from New Orleans, meals, and lodging, is $1,600, which you may deduct subject to the 50% limit for meals. If, on your way home, you spend three days in Mobile visiting relatives and incur an additional $400 in travel costs, your deduction is limited to the $1,600 (less 50% of meals) you would have spent had you gone home directly from New Orleans.

Reimbursement for weekend travel.

If your employer extends your business trip over a weekend to take advantage of discount airfares that require a Saturday night stayover, you may deduct the cost of meals, lodging, and other incidental expenses incurred for the additional night. The reason for the stayover has a business purpose: to cut travel costs. If your employer pays for the expenses directly or if you are reimbursed under an accountable plan (20.32), the payment is not taxable to you.

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