Wouldn’t it be great if you could pay for a portion of a vacation through income tax deductions? You can, if you meet certain provisions. n The vacation could be a few days at a truck show or a week of crisscrossing the country to visit carriers. You have more options if you are independent because you might need to meet with shippers and brokers.
A deduction is not a full cash-back deal. If you deduct $1,000 in business expenses and you’re in the 15 percent tax bracket, your tax bill will shrink by $150. Hardly a free vacation, but enough to cover some meals or lodging expenses. Of course, you’ll save more if you spend more (up to $2,000 is deductible for business trips) or if you’re in the 28 percent tax bracket.
Say you want to talk with recruiters at a truck show and you bring your family. Trucking accountant Perry Wiseman gives these guidelines for business deductions:
Transportation. If you drive to the show, all costs are deductible, even if your family is with you. If you fly, only your ticket would be deductible.
Hotel. You can deduct the rate for only one person, which is often lower than the family rate.
Meals. Ask for separate receipts to show your expenses apart from your family’s. If you treat your dispatcher or other company personnel to a meal, you can deduct 50 percent of that cost.
Incidentals. Laundry, tips and similar items are disputable matters, so get professional consultation.
You can’t write off your spouse’s expenses unless he or she plays a “substantial” role in the business and has an economic reason for attending. “Generally, that would mean that your spouse does all the bookkeeping for the business, secures loads or sends out invoices in the case of an independent,” Wiseman says.
He says you need to spend a substantial part of each day on business. For example, you probably couldn’t get away with attending a daily one-hour seminar. For every appointment, note the date and other particulars.
Some accountants are strict interpreters of tax guidelines; others are just the opposite. Ultimately, you are accountable, so be sure you feel confident with your deductions.
You can get Uncle Sam to chip in for that sun-drenched, food-laden cruise you’ve dreamed about, provided you jump a few hurdles. First, the main reason for going needs to be an onboard business seminar that applies to owner-operators. Then you can deduct your expenses if these requirements are met:
"Until a formal regulation is established with clear guidelines and borders ...