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Question

I operate a website business that is similar to City Search (http://www.citysearch.com/) or Digital City (http://cityguide.aol.com/). Its a local city guide. In my case, its for Orange County, CA.

I go eat out with my spouse often to rate restaurants and write articles for my website. I also travel out of town for pleasure, stay at a hotel, and write articles about that experience on my website.

The website is updated everyday, and its a legit business with a business license, deriving advertisement income.

I'm wondering how much of the meals and travel expenses would be tax deductible. My spouse travels with me, but he only helps me out with the bookkeeping a bit.

I would be delighted to hear from you.

Thank you in advance for your considerations!

Submitted: 746 days and 14 hours ago.
Category: Finance
Value: $9
Status: CLOSED
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Optional Information

Optional Information:
Huntington Beach, California

Already Tried:
N/A

Posted by Ed Johnson 746 days and 2 hours ago.

Answer

Dear XXXXXXXXX,

Thank you for your question.

Your meals are deductible, but your spouses are not. Normally, business meals are only 50% deductible for any business related travel.

The airline tickets and hotel meals are fully deductible for you to the extent of business, but you have to allocate between personal and business use. For example: your spouses share is not deductible, and the portions used for side trips, etc are also not deductible.

You have to allocate based on percentage of use for business actives and pleasure.

Please use this IRS pamphlet for a guide: http://www.irs.gov/pub/irs-pdf/p463.pdf

 

 

745 days and 18 hours ago.

Reply

Reply to Ed Johnson's Post: Hello Ed,

Thank you for your response! Also, I see that you have experience in equity compensation. I would like to ask you a few questions there as well in the near future.

To clarify on the allocation of travel expense, how much would actually be considered "business related" if I go on a vacation to a hotel for one night, enjoy myself, and write an article for my website about that experience?

The nature of my business allows for this, where its similar to a TV programming (seen a lot on the Food Network) that may introduce restaurants, hotels, and activities while there.

Its a lot of easy, fun work, but the article does create value to other people that read it. I also derive advertisement income through it.

So, in my case, how much of the entire travel expense will be deemed for business purposes?

Thank you,

Taeko

Accepted Answer

Dear XXXXXXXXX,

The IRS regs do not say you can not have fun at what you do. However, if you take your wife, then she is not part of the job. Unless you hire her and pay her on a W-2.

Now concider that there is a difference in hotel rate from what you would pay alone and having a second adult. I would apportion by the difference in hotel rate, and take the full cost of the meals that you write about.

 

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Expert: Ed Johnson
Pos. Feedback: 100.0 %
Accepts: 
Answered: 11/8/2007

HR & Business Operati&ons C&onsultant

Central Michigan University, MSA Candidate; Global Compensation Operations Mngr; AA Degree Lib Arts

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