Tax Facts & Benefits

Get the facts

It is clear from the tax code that business travel by ship has been and remains tax-deductible. Moreover, so is business travel by car, bus, train or airplane, but whether the expense is in fact tax-deductible, depends upon the individual facts and circumstances involved. You must qualify a business expense under Section 162 and once you get past that hurdle, you can determine any limitation under Section 274. The facts and circumstances will still bear on the question of deductibility.

How do facts and circumstances affect your ability to deduct your business travel as a business expense?

While all scenarios may be different, here is a quick example. Two professionals attend the same seminar and after audit, one may deduct and the other may not. How is that possible? The professional denied the deduction might:

Be retired and have no earned income from his profession.
Have attended a seminar that was not related to or helpful in his profession.
Have failed to attend the seminar courses offered.
Have traveled extensively at the site of the seminar.
Have intended to take a vacation and the seminar was not the principal purpose of travel.
Have remained outside the U. S. more than seven days and spend more that 25% of the time in non-business activities (excluding days in transit)

Every one of these examples would also be applicable to travel by car, bus, train, or plane. Based on this example, we are sure you understand why it's so important to consult a tax advisor in order to go over the details of your trip and determine whether your travels will be tax deductible.