Balancing work and play might be one of the toughest jobs for busy entrepreneurs. My philosophy is to work everyday and play everyday. When I tell my employees to "enjoy the journey," I mean it.
If you're planning a last-minute vacation in August (or any time of year), there may be some ways to keep your family happy while benefiting your business or a charity. If a working vacation is part of your plan, remember these two words: ordinary and necessary. That's the litmus test to write off expenses for your business; and make sure to keep personal and company records separate.
Let's start with your company expenses -
1. Lodging at a resort or hotel that offers training sites has become more common for entrepreneurs. You can write off ordinary and necessary training costs for your business-- these are tax deductible--but any additional costs for your family aren't. For example, your family can share a room at no extra cost, but additional meals and entertainment costs are on you.
2. Transportation for the entrepreneur such as airlines, taxis, shuttles, bus tickets, train, tolls and mileage could be a business deduction. While travel for the family is not deductible, unless they are part of the business, the entrepreneur's travel expenses to and from the training location would be tax-deductible. If you extend the trip for your family, the lodging, meals and incidentals related to the personal days are not deductible-- but the airline travel for the entrepreneur is still the same. Recordkeeping is key, so make sure to separate business and personal expenses and check with your tax advisor to make sure you're on track.
3. Meals and entertainment for the entrepreneur during the business portion of the trip may be 50 percent tax deductible. If you're networking with business associates for meals, this can also be a business expense. On the other hand, if you're dining with family while away on business travel, your portion as the entrepreneur is the only one that's deductible.
4. Parking - If you're parking at the airport during the business training, the portion for the business days is deductible. The parking fee is the same whether entrepreneur travels to/from airport with or without the family.
5. Incidental expenses for the entrepreneur can be deductible such as laundry, pressing clothes, overnight package delivery and tips. Remember, those expenses for your family in tow are not deductible.
If you plan to travel for a philanthropic cause -
6. Travel expenses for qualified charities. Churches and governments are generally qualified, but most groups need to apply to the IRS for this status. Check out your charity here before you donate anything. The deduction qualifies only if there is no significant element of personal pleasure, recreation or vacation in the travel. The charity work you're involved with has to be real and substantial throughout the trip in order for you to deduct expenses. For example, if you travel to a third world country and help build a solar power grid for a poor village. Or you act in an official capacity for your church as Finance Director, for example. It doesn't count if you only have nominal duties or don't have any duties for large parts of the trip.
You also can't deduct the value of your time or services to your charity. This includes income lost while you serve as an unpaid volunteer.
Summer is quickly coming to an end so enjoy the journey, build your business, or give back to a qualified charity and you may save money along the way.