Self-employed individuals may erroneously presume that because business convention expenses often fall under the “ordinary and necessary” clause, all business convention travel expenses are also deductible. However, there are a number of explicit limitations—and surprising advantages—to be aware before writing-off these types of travel expenses. This makes the answer to the question “Is travel to a convention deductible?” more nuanced. Learn about eligible business convention travel expenses to enjoy your next trip without Uncle Sam looking over your shoulder.
When Is Travel to a Convention Deductible?
According to the IRS, you may deduct your travel expenses for a business convention with the mileage deduction.But only if you can show that your attendance to the convention benefits your business. Your appointment as a delegate to the convention is not enough to warrant business travel expense deductions. The travel expenses must be connected to your own business.
While this deduction poses a boon for solo travelers, if your family accompanies you to the convention, you cannot deduct their travel expenses unless they also happen to be bona fide members of the business. Moreover, if the convention is motivated by purposes outside of the realm of your business (like investment-related or political gatherings), related costs do not qualify as deductible business travel expenses.
Location limitations also apply. The IRS generally considers business conventions held in North American territory to be fair game for business travel expense deductions. This includes desirable locations such as the Virgin Islands, Barbados, Puerto Rico, Aruba and even the Bahamas. By the same token, though, you can’t deduct travel expenses for business conventions held outside of North America unless the meeting is both necessary to your business and passes the “reasonableness test.” See IRS Publication 463 for a list of allowable North American locations.
How Do You Show that Your Attendance to a Business Convention Benefits Your Business?
Most business conventions provide an official agenda including the purpose and planned activities for the convention. Compare the convention’s official agenda with your business responsibilities. If you determine that the convention agenda is related to your position, this can help prove that your attendance to the business convention was indeed for business purposes.
What Qualifies as Deductible Business Convention Travel Expenses?
When you’re attending a business convention away from home, deductible business travel expenses include:
- Air, train, bus, taxi or car fares
- Business-use portion of car and mileage expenses at the convention location
- Taxi and other transportation fees between the airport or train station and your hotel, the hotel and the work location or from one customer or place of business to another
- Business meals (Deduction limited to 50 percent of the unreimbursed amount.)
- Hotel fees
- Cleaning and laundry fees
- Business communications by phone, fax or other devices
- Computer rental fees
- Shipping fees for baggage
- Tips paid for any of the above expenses
If you are self-employed, you can deduct these business convention travel expenses on Form 1040, Schedule C, or on Form 1040, Schedule C-EZ.
MileIQ’s blog does not constitute professional tax advice. You should contact your own tax professional to discuss your situation.