You just found out you're going to have to travel to another state on business this summer - and your meetings will be held at a popular tourist destination. You want to bring your spouse along and extend your trip for a couple of extra days for some much-needed rest and relaxation.

Your question: Will the IRS share some of the bill?

A Less Taxing Trip: As a self-employed person, you are entitled to deduct your travel costs for out-of-town business trips, including plane fare or other transportation, meals (subject to the tax law's 50% limitation), and lodging. But special rules apply when your trip is partially for business and partially for pleasure.

Not surprisingly, only the expenses allocable to the business portion of your trip are deductible. The IRS doesn't allow a deduction for a spouse's travel expenses unless the spouse is an employee of the business and is traveling for a true business purpose.

Sweet Deals: But there are some ways the tax rules might work to your advantage.

• If you trip is primarily for business, you can deduct all of your airfare - you don't have to allocate a portion to nondeductible personal travel. As note, your spouse's plan fare probably won't be deductible.

• If you travel by car, the cost of getting to and from your destination is fully deductible when the trip is primarily for business, event though your spouse travels with you. You'd incur the same expense if you traveled alone.

• The cost of a single hotel room is usually more than half the cost of a double. You can base your lodging deduction for the business part of your trip on the single rate. So, for example, if you and your spouse stay in a room that costs $200 a night, but the rate for single occupancy is $125, you can deduct $125 (for the business days) - only $75 of the cost is allocable to your spouse.

Copyright 2004 by NPI.
Used by permission