Make Your Skiing Vacation Tax Deductible
There's no law that says you can't have fun while you're on business
Distant view of Breckenridge slopes
Is it possible you could experience a fun skiing vacation, rent a great condo to stay in, and write it all off as a tax deduction the next time tax season rolls around? Not only is it possible, it's easy to accomplish - thousands of people every year take advantage of this wonderful tax break. Just follow a few basic principles and you may be able save a lot on this year's skiing getaway.
Are You Eligible?
The rules for qualifying your skiing vacation as an eligible tax deduction are straightforward enough, but these guidelines must be followed carefully so you don't attract the attention of an IRS auditor.
You must either be a business owner, or be self employed. Individuals who are exploring legitimate business opportunities, such as taking over ownership of an established business, also make the grade.
You must establish a reason to visit your destination. This is the most seemingly ambiguous qualification, however it's really quite simple: the reason that you're going on this trip must primarily be to conduct business meetings. So what counts as a business meeting? Activities motivated by profit or to advance your business, such as closing a deal, attending a convention or trade show, or prospecting for real estate.
Finally, you must conduct business the majority of your days on your trip. The IRS defines a "majority" of the time as being more than half of the days you're away being used for business. And by "day" the IRS means at least four hours and one minute of a day must be for business only.
Keep Your Receipts
You'll need to be able to prove that your trip was scheduled for business reasons, as opposed to personal leisure time. To do this, you'll need to establish a verifiable reason to go on the trip in the first place. It's important to keep this stipulation in mind! Flying out to your favorite skiing destination to hand business cards to anyone and everyone who will take one is not a legitimate business trip, and will not earn you any points with your CPA - or the IRS.
The best way to satisfy this requirement this is to send out queries or proposals to businesses surrounding the resorts you'd like to visit, set up an appointment to visit them personally, and get documentation that confirms a planned meeting. During the meetings you'll want to keep detailed notes of what took place and when. If possible, try to get a dated document, such as an agenda, showing when and where the meeting took place.
Many of the things you buy on your vacation may be 100% tax deductible: travel expenses, rental cars, tips for servers, and - yes - even our Silverthorne townhome! Keep receipts for everything you purchase during your trip that is over $75. It is very important to keep a receipt of your lodging. Depending on the kind of business meetings you conduct, you may even be able to deduct your lift tickets.
Family members also qualify for deductions, but only if they're your employees. You can bring your spouse or kids along on your skiing trip and deduct their expenses on your tax returns, but only if they're legitimate employees of your business and have a valid reason for joining you on the trip. For instance, if your spouse is also your best salesperson, then it's important you bring them along to help close an important deal.
It's a good idea to consult a certified tax professional before you start planning your getaway, as they'll be able to help you piece together a strategy that best fits your needs. Hopefully after reading this, the gears are churning on how to write your next skiing vacation off as a tax deduction.
Disclaimer - The author of this article is not a tax professional. The article was compiled after reading articles written by tax professionals. The information in the article is believed to be corrected but not guaranteed.
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