Business travel combined with vacation

[Jiggers]

Spouse files Schedule C for her business.

This year she goes to the semi-annual convention for her trade, to learn what is new for the service she provides, and the related products needed for her business.

Approximately 975 miles from her business.

She drove two days to get there, one night in a motel.

She is at the convention 4 nights, staying in a hotel.

On the return trip home she visits relatives in two cities. Out of the way and not a direct route back to her business. Spent 7 days visiting relatives.

I say that 975 miles at the IRS mileage rate to the convention, motel on the road, and the 4 nights at the convention hotel, and all related meals(actual or per diem) are deductible.

However the side trip on the way home is not deductible.

Correct in my thinking or is my mind muddled after too much turkey and adult beverages at the in-laws and nothing is deductible?

Would your answer change if the semi-annual convention is also offered in a second location that is closer to her business?

[ChEAr$]

I see no reason not to deduct 2 x 975 miles at standard rate.

That's the way I do it.

[erchess]

My Take

Agree with Jiggers and Harlan on the mileage and with Jiggers on the motel on the way there and the motel at the convention.

As for what if there were an alternative convention closer to home, to me that's a little dicey. I'm assuming that the total cost of just attending the conventions would be significantly lower if she attended the closer one. I'm also assuming that attending the closer convention would result in more personal miles to visit the same relatives. The question would then be whether there is any business purpose for preferring the more costly convention. If it were not for the personal trip I think the IRS would trust her to make the best business decision very much as it trusts her with the decision whether to buy a more or less expensive computer for use in the business. In my mind it would come down to whether the sponsoring company markets the closer convention as equally good or as a second best option for those who can't attend the more distant one.

A similar question could arise for a tax professional interested in attending an IRS Convention but not the one closest to home. As a practical matter the IRS agent isn't likely to question your choice of one to attend unless convinced you are cheating but aware of lack of proof against you. But if they did want to raise the issue, what would happen if your reason was that something in your personal life led you to reject the closer one or drew you to the more distant one? I realize that if you happened to have a business related reason (perhaps a face to face audit the day before or after the closest one) you'd be sitting pretty.

[Gretel]

I see no reason not to deduct 2 x 975 miles at standard rate.

That's the way I do it.

Looks like she is just making the 50% rule, 15 days total, 8 days biz (4+2+2), 7 days personal. I am not sure though about the return trip. I think the time needed to get back anyway should count as biz days. If this is true, then all travel expenses going to the convention and returning are deductible in addition to the convention expenses.

Besides deducting the full mileage I also would deduct per diem for those days.

However, if travel days are somehow not counted then she can only deduct the convention expenses. I am curious what others think.

[Gretel]

Interesting point. I think as long as one doesn't go overboard (or abroad) with the costs it would be very difficult for IRS to even come close to not allow education as business expense for a location further away from home.

So many different reasons can contribute to this decision, like timing for even being able to leave office, climate (if you can't deal with humid heat you might be nuts instead of being able to attend seminar). Lower prices on hotel and/or airfare can be a good reason. I am sure each of us can come up with plenty more reasons.

I am also just thinking of my times driving down to the next bigger town (1 hour) in winter. Last winter I stayed overnight several times because it was too late and/or too expensive. I that personal or business related?

[Gary2]

Looks like she is just making the 50% rule, 15 days total, 8 days biz (4+2+2), 7 days personal. I am not sure though about the return trip. I think the time needed to get back anyway should count as biz days. If this is true, then all travel expenses going to the convention and returning are deductible in addition to the convention expenses.

Besides deducting the full mileage I also would deduct per diem for those days.

However, if travel days are somehow not counted then she can only deduct the convention expenses. I am curious what others think.

Pub. 463 spends a fair bit of space on business vs. personal for travel out of the country. However, for travel within the US, it just distinguishes between "primarily for business" versus "primarily for personal reasons" without much guidance on determining how to judge this. I haven't checked the regs to see if they have more guidance, so I'm not sure if you count days, nights, overall time, or look at other circumstances.

For example, when I signed up for the IRS forum this past year, it was entirely because I had already planned a personal trip that happened to be at the same hotel that weekend. So it wouldn't even enter my mind to take any of the travel as business, even if I spent more days on business, since there wouldn't have been any business expenses without the personal aspect.

Conversely, imagine scheduling an important business trip for five days, then when you get there, you finish up in just one, and rather than paying to change the plane tickets, you use the remaining four days for touring. Does that force the trip to be treated as personal?

[oceanlovin'ea]

IRS allows the days at the convention or event plus travel days both ways. So in this case it would be 8 days. The rule is that you must have more business days than personal days to deduct travel expenses. If she added 7 days to the trip to visit family, she would be within the guidelines set by IRS.
If it were me, I would deduct the mileage as 975 X 2. I would not add the extra mileage to go to another location to visit family. I would deduct all her expenses on the way there and at the seminar. Expenses on the way home would be personal.
I have traveled to Atlanta to IRS forum several times. I have family and friends that live in the Atlanta area. I chose not to stay at the hotel but to stay with my friends and family while I was there. I deducted the mileage for the whole trip because I had to get to the places I was staying and back to the seminar. I usually stayed a couple of extra days and visited some other friends in Athens, GA. I didn't include the mileage to go there because that was personal.
I am going to an update seminar in December. It is offered in Tampa but I decided to go to Tallahassee to attend. Timing was better. Also my husband's sisters live in Tallahassee. He can visit with them while I am at the seminar. I don't feel like I can't take my expenses going to a different city for my education. We can get our education wherever we want (within reason)

Linda, EA

[JohnH]

Linda: Surely you could find a reason to talk about taxes while you're with your friends in Athens...

[Kram BergGold]

50% rule?

There is no 50% rule for domestic travel. To deduct round trip travel in the US the primary reason for the trip has to be business. In this case, where the taxpayer first went to the business place and then engaged in personal travel at different locations after completing business, the primary reason is business. This would be true even if there was another personal day at the end of the trip. I would take round trip miles. I would probably take a meals per diem for the ride back. Hotels on the ride back I probably would not take.

[oceanlovin'ea]

Actually the friend in Athens is my client and we did talk about taxes. I stayed with friends while at the forum that are in the tax business too. Another family I visited while I was there is also my client and of course there were business talk. I think I might have even picked up a check that was due me.

On one trip I prepared my cousin's tax returns for 3 years while I was up there.

We never just go anywhere and just have fun.

Linda, EA