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Marvin,EA
Marvin,EA, Enrolled Agent
Category: Tax
Satisfied Customers: 1663
Experience:  Enrolled to Represent Taxpayers Before The IRS
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Hi. I am a travel agent. I take numerous trips per year. Some

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Hi. I am a travel agent. I take numerous trips per year. Some are exclusively for the purpose of improving my business, increasing my knowledge of travel and tourism, taking FAM trips, etc. Others are a combination of another business and my travel business, but expenses are explicitly for the travel business. And one or two are with family, but involve significant travel business experiences, tours, etc... and all of these trips involve building relationships with tourism persons, cruise/travel companies and/or current/future agency clients. My question... is this reasonable and expected so that virtually all expenses are tax deductible? Most IRS employees I have asked have said YES, although there is nothing in PUB 463 that explicitly defines the rules as they pertain to Travel Agents.
Submitted: 5 years ago.
Category: Tax
Expert:  Marvin,EA replied 5 years ago.
Hello and thank you for using Just Answer. Are you self-employed?
Customer: replied 5 years ago.
Yes, self employed and home based. We do not expense the use of our home, but we do expense things like equipment, supplies, etc.
Expert:  Marvin,EA replied 5 years ago.

If you can show that the main purpose of the travel events were for business, engage in business with a person or person during a meal or entertainment activity and have more than a general expectation of receiving income or some other specific business benefit in the future the expenses can be deductible.

Business Expenses- Deductibility Guidelines:

Business Meal

Meal with employee, business discussed 50%

Meal with employee, no business discussed 0%

Meal with customer, business 50%

Meal with customer or road trip 50%

 

Travel Expenses

Transportation and lodging expenses 100%

Transportation to and from business -related

entertainment 100%

Meals alone while away from home 50%

Expenses for travel as form of education 0%

 

The IRS Code does not give a complete list of what is deductible and what is not deductible. Instead, it says all ordinary and necessary expenses paid or incurred during the taxable year in carrying on a trade or business are tax deductible [IRC 162(a)].

 

No deduction are allow for family members traveling with you on business trips.

Customer: replied 5 years ago.
I have an additional question or concern... I have an IRS "auditor" telling me that I must prove that as the Travel Agent and owner, I have the implicit right to deduct expenses... although I told the IRS "auditor" that he needs to show me where, in the IRS rules and regulations, it say that I cannot deduct my trips and vacations (all with business purpose and business benefit)... as I am a Travel Agent and every trip generates information, knowledge, relationships (even future ones), etc. So in a nutshell, I need to know that what I have always thought was acceptible, legal and normal for a Travel Agent doing his taxes, and what other IRS phone representatives have told me totally acceptable if ordinary, necessary and/or incurred for the benefit of future revenues... is fine and SHOULD NOT be challenged.
Expert:  Marvin,EA replied 5 years ago.
I am sorry, but no person can tell that the expenses you will deduct on your tax return will not be challenged by the IRS. The example is you talk with someone from the IRS who say that the expenses are deducible. Another person from the IRS might take the position the some or all of the expenses are not deductible. My advice is have documentation on all deductions you take on your tax return and keep the records for at lease 6 years.
Customer: replied 5 years ago.
I guess what I want to know is... is there something in the IRS rules and regulations that says anything specific about Travel Agents.... and travel expenses? In other words, I know there is a lot about Travel and Entertainment and Meals Expenses, as they pertain to Self Employed Businesses... but since Travel Agents are one of the business types with a code# XXXXX the IRS.... is there anything, anywhere, in writing that is explicit to expenses incurred by travel agents when travelling!
Expert:  Marvin,EA replied 5 years ago.

I am sorry, but there is no code that have explicit rules or laws on Travel Agent's business expenses. If follow the IRS rules on travel and entertainment expenses and keep records of all your expenses you deduct on your tax return you should have not problems with the IRS in verifying your expenses if you are audited.

Marvin,EA, Enrolled Agent
Category: Tax
Satisfied Customers: 1663
Experience: Enrolled to Represent Taxpayers Before The IRS
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