Topics covered in tax bulletin articles:

1 Deductions

TAX  TIP FOR BUSINESS TRAVELERS--THAT EXTRA DAY OR WEEKEND IN NEW YORK, CHICAGO, ATLANTA, OR HAWAII COULD BE DEDUCTIBLE

      The basic tax rules for business travel (a trip away-from-home) is that when you travel primarily (not necessarily solely) for business reasons, you can deduct the round-trip air fare plus 100% of the lodgings occupied and 80% of the meals consumed while on business.  For reimbursed employees who properly substantiate expenses, business travel generally has no tax consequences.  On the other hand, strictly personal days at the out-of-town site--to relax, shop or golf, for example--generally are not deductible as business travel and are taxable compensation income for the employee if he or she is reimbursed for the cost of personal days.

     For the self-employed, business travel is deductible as indicated above, except that the meals and lodging for personal days are not deductible,

     There are, however, situations where a personal travel  day can be treated as a deductible business day.

     One case is when work extends into a weekend, e.g. where the work from one week does not end until Saturday morning or later,  and the work of the following week starts early Monday morning.  When you work both weeks in the same city, and the trip home requires several hours, you have the choice of staying over Sunday and not spending most of the intervening time on travel.  Both weekend days are deductible even if there is no business on either, when the expense, time, or both involved in the trip home would be comparable or greater than the cost of the stay over the weekend.

     In some cases, you may want to do just the opposite -- go home, say for your spouse's birthday, and then come back in the middle of the business week.  In this case, the trip home is treated as a deductible travel as long as the cost of the travel to home and back does not exceed the cost of meals and lodging incurred had you stayed at the out-of-town location. This applies to some trips within California.

     Airline pricing strategies over the last few years have produced a new situation where otherwise personal travel may count as business travel. For several years, the cost of airline tickets was substantially cheaper if you travelled at the end of a week and stayed over the Saturday night, rather than returning home Friday night or Saturday.   If you did that, the trip qualified for excursion fare rather than business fare. Many corporations found that it was cheaper to have employees spend Saturday at the out-of-town location before flying home. The excursion fare, plus the extra day's meals and lodging cost, was less than the corporation would have spent on airfare that did not include a Saturday stay-over.