Strategy: Stay until Sunday. Besides earning the discount, you can deduct the cost of staying an extra day as business travel, even though you’ve finished your business.
Example: Suppose you’re scheduled to fly into town on business Wednesday and leave Friday night. The round-trip airfare is $1,000, but only $250 if you stay through Saturday.
If you spend $100 on meals each day and $200 for the hotel each night, the three-day business trip would cost $1,900 ($1,000 airfare plus $600 lodging plus $300 meals). But if you stay through Saturday and leave Sunday morning, it costs only $1,450 ($250 airfare plus $800 lodging plus $400 meals). So, you save $450.
The IRS allows you to deduct lodging costs and 50 percent of meal costs for all four days if you stay longer to qualify for discounted airfare. It doesn’t matter if you spend the extra day relaxing.
One catch: The discounted rate, plus the cost of the additional lodging and meals, must equal less than the lowest available fare (not including a Saturday layover)when you booked the flight. (IRS LR 9237014)
- Small Business Tax Deduction Strategies No matches