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Lev
Lev, Tax Advisor
Category: Tax
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Experience:  Taxes, Immigration, Labor Relations
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I have a marketing start-up that focuses on bars and restaurants.

Resolved Question:

I have a marketing start-up that focuses on bars and restaurants. My target market is a ski town which is 6 hours away. Can I write off my travel expenses like food, gas, and lodging even though I sneak in a some runs here and there?
Submitted: 9 months ago.
Category: Tax
Expert:  Lev replied 9 months ago.

Lev :

Hi and welcome to our site!
Business expenses are the cost of carrying on a trade or business. These expenses are usually deductible if the business is operated to make a profit.
To be deductible, a business expense must be both ordinary and necessary. An ordinary expense is one that is common and accepted in your trade or business. A necessary expense is one that is helpful and appropriate for your trade or business. An expense does not have to be indispensable to be considered necessary.
Travel expenses are deductible if they are business related. For tax purposes, travel expenses are the ordinary and necessary expenses of traveling away from home for your business, profession, or job.

Lev :

You are traveling away from home if:
--Your duties require you to be away from the general area of your tax home (defined later) substantially longer than an ordinary day's work, and
--You need to sleep or rest to meet the demands of your work while away from home.

The IRS provided following illustration when transportation expenses are deductible

Full Size Image

Lev :

So - considering your information you may deduct your transportation expenses, lodging and meals if (1) you travel for business purposes (2) your duties require you to be away from your tax home.

Lev :

Please see for reference this publication - http://www.irs.gov/pub/irs-pdf/p463.pdf

Customer:

I've heard that there can be issues between blending work and pleasure though. For example, having a meeting out of town on Friday but extending the trip through Sunday.

Lev :

Yes - if you mix business and personal travel purposes - you may deduct only business related expenses.

Lev :

You can deduct all of your travel expenses if your trip was entirely business related. If your trip was primarily for business and, while at your business destination, you extended your stay for a vacation, made a personal side trip, or had other personal activities, you can deduct only your business-related travel expenses. These expenses include the travel costs of getting to and from your business destination and any business-related expenses at your business destination.

Customer:

In my case, I need to build relationships with local business (bar and restaurant) owners. Eating and drinking at their establishments allows me to do that in a non-formal way.

Customer:

In a sense the whole trip could be viewed as market research, couldn't it?

Lev :

Regardless - in case of audit - you should be able to proof that these expenses are common and accepted in your trade or business.

Customer:

Ahh I see. How would one prove that? Citing others in the trade?

Lev :

That is a possibility. But normally the auditor is specialized in certain types of business and shoudl be familiar with your type of business.

Lev :

However - you point is correct - you need clear separate business and personal expenses.

Customer:

Ok. Thank you. I'll read through the link you sent.

Lev, Tax Advisor
Category: Tax
Satisfied Customers: 22616
Experience: Taxes, Immigration, Labor Relations
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