Follow IRS rules about business travel and deductions and enjoy the trip!
Are you planning to attend the National Association for Family Child Care Conference in Orlando, Florida on July 11-12, 2014?
The program guide gives you all the details about workshops and seminars that will be taking place, including valuable business practices for record keeping and general business administration of your child care business.
- You will have the opportunity to meet keynote speakers, like Tom Copeland, who will be conducting several workshops.
- Interface with other child care providers from around the country and see what they are doing for their business.
WHAT’S EVEN BETTER – YOU HAVE DEDUCTIONS!
So What’s Deductible?
The IRS has its ground rules.
Depending on the facts and circumstances, you may be able to deduct many of the following (if not all):
- 50 percent of the cost of meals when traveling
- air, rail, and bus fares
- baggage charges
- hotel expenses
- expenses of operating and maintaining a car, including the cost of gas, oil, lubrication, washing, repairs, parts, tires, supplies, parking fees, and tolls
- expenses of operating and maintaining house-trailers—provided using one is “ordinary” and “necessary” for your business
- local transportation costs for taxi fares or other transportation between the airport or station and a hotel, from one customer to another, or from one place of business to another, and tips incidental to the foregoing expenses
- cleaning and laundry expenses
- computer rental fees
- public stenographer fees
- telephone or fax expenses
- tips on eligible expenses
- transportation costs for sample and display materials and sample room costs
Travel Expenses Must Qualify As Business Expenses
Your travel must be primarily business-related in order to be deductible. Pleasure trips are never deductible. You can deduct travel expenses only if you are traveling away from home in connection with the pursuit of an existing business. Travel expenses you incur in connection with acquiring or starting a new business are not deductible as business expenses. However, you can add these costs to your startup expenses and elect to deduct a portion of them and amortize the remainder over 180 months.¹
So, if you are attending the NAFCC conference, or any other family child care conference, you have an opportunity to take advantage of the business deductions available to you.
In addition to the above – Tom Copeland states, “you can deduct the cost of travel to the conference (car, plane, train, bus) if the “primary purpose” of your trip is business. That means that more than half the reason for your trip must be to attend the conference. Count your travel days as business days.
So, lets’ say you left for Orlando on Thursday, July 10th, attended the conference all day Friday and Saturday, went to Disney World on Sunday, and returned home on Monday the 14th. Since the two travel days can be counted as business days, you have four business days and one personal day. Clearly, the primary purpose of this trip is business and you can deduct 100% of your travel costs.
If you stayed over at Disney World for two days (Sunday and Monday) and returned home on Tuesday the 15th, you could still deduct 100% of the travel costs because you can count four business days and two personal days.
If you drive to Orlando, you can claim $.56 per mile roundtrip.
You can deduct 100% of the hotel costs at the conference if you travel alone. If you travel to Orlando with your family, you can deduct 100% of what it would cost for you to stay at the hotel alone. The cost of a king bedroom at the Caribe Royale Orlando is $129 per night. Since the room includes a sleeper sofa, you can deduct the full $129 per night if you bring along your husband and two children. If the children stay in a separate room, you could not deduct the cost of the separate room.
You cannot deduct costs for the personal days you spend in Orlando (hotel, food, transportation).
If you hire an employee, your husband or your own children to help you with your business, and they attend the conference, you can deduct their travel and conference expenses. They must work for you enough to justify the expense of the conference.
Other costs you can deduct for your trip to Orlando: taxis to and from the airport, conference registration fees, tips, and food costs.
You can claim food costs in one of two ways: use a daily per diem or use your actual food costs. The daily per diem for Orlando is $56. You can only deduct 50% of this amount. So, if you left home at 9am on Thursday July 10th and returned home on Sunday, July 13th at 9pm, you were gone for 3.5 days, you could deduct $98 as a food expense (3.5 days x $56 per day = $196 x 50% = $98). You do not need food receipts to claim this deduction. If you saved receipts of your actual food costs, you can deduct 50% of your food receipts.
If you paid someone to care for your own children (who was not a family member) while you were in Orlando, you could claim this amount towards your personal child care tax credit. If you hired someone to care for your daycare children while you were gone, you can deduct their wages as a business expense”.
Tom Copeland – www.tomcopelandblog.com
Image credit: www.nafcc.org