How To Write Off Business Travel
I travel a lot and people always say “Hey Kam, you’re an accountant, you’re probably writing off all this travel. So what’s your secret?”.
Does this mean I can write off my vacation as a business expense?
Generally speaking, you can expense anything or any expense that you incur to earn income. Now, there are some exceptions to this based on the Income Tax Act, of course, but based on that, if you are traveling with a business purpose, you’re able to write off that travel.
So let’s take a look at a couple examples to show what’s the business purpose for traveling.
In early 2023, I went to Cancun, Mexico for a close friend’s wedding.
The wedding was about two days long. I was there for seven days and after the wedding, I met a couple of business associates. I went out to dinner with a client who’s also a good friend, and I worked on making content and I also wrote my ebook while I was there in Mexico.
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So does this mean I can expense the whole trip?
As you can tell, the primary reason I booked this trip was because I was going to this wedding.
Now all that other stuff came in secondary, but the main reason I went was for the wedding. So that means the purpose of this trip was not purely business. So therefore, I cannot expense the hotel and the airfare.
But when I met that business associate, I rented a WeWork. So things like that, I can still expense, but the airfare and the hotel costs, I cannot.
Let’s look at the second example. I hired a Virtual Assistant (VA) in the Philippines. We are a very specialized accounting firm. We use specific apps that not all firms use. To train this person, it was best and the fastest to be done in person.
In total, I was in the Philippines for over a month. The cost of the airfare and the Airbnbs, hotels, was just over $5,000.
So Monday to Friday I was with my new hire, working alongside each other, answering any questions. But on the weekends I was able to take quick flights in and out of cities. I went to the beach, I went island hopping, I went to Boracay and El Nido.
Do you think that that trip could be expensed? Because the primary purpose of this trip was to meet my VA, meet my new hire, and also train her. That’s the reason why I booked the flight. That’s the reason why I booked the hotels. This trip qualifies to be expensed.
Now you’re probably thinking, what about the side trip to Boracay and Palawan and all that?
Unfortunately, that is all personal. That cannot be expensed. But my flight to Manila, the airfare when I was there, can be expensed.
But next time, if I want to expense the additional travel to Boracay or whatever, I can take my entire team and we can make it a team event and expense it that way and that’s actually something that we’re planning on doing if we hit our targets for next year.
Here Are Some Common Travel Expenses:
Make sure you include these.
The Costs To Get There:
Flight, train, or rental car costs.
Hotel or lodging expenses like an Airbnb.
Meals directly related to your work, like a lunch meeting with a potential client or supplier.
Local transportation costs (taxis, public transport, and gas).
Side note: if you get pulled over for speeding or whatnot and get handed a ticket, the traffic ticket is not tax deductible. We do get asked that.
Learning or Networking:
Fees for conferences or workshops related to your job.
Internet and Communication:
Costs for business calls, internet access, and mobile data.
Supplies or materials needed for work during the trip.
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