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Book tax breaks for weekend travel

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in Small Business Tax,Small Business Tax Deduction Strategies

If you travel extensively on business, you probably know the drill: Either the airline or hotel, or both, may offer a lower rate if the stay includes a Saturday night. It’s not as prevalent as it was years ago, but Saturday night stay savings are still around.

Strategy: Figure out the tax consequences. For instance, if you stay overnight on Saturday, this may give you an edge.

Generally, you can deduct business travel expenses if the “primary purpose” of the trip is business-related. But the number of business days versus personal days is critical. Assuming you qualify, a Saturday layover may provide extra tax savings.

Example: You’re scheduled to fly into town on business Wednesday and leave Friday night. The round-trip airfare costs $1,200, but if you return on Sunday morning instead, it only costs $500. Also, the hotel normally costs $200 a day, but the daily rate is cut in half for a Saturday night stay.

If you spend $100 on meals each day, the three-day business trip would cost $2,100 ($1,200 airfare + $600 lodging + $300 meals). But if you stay through Saturday and return Sunday, the total cost is just $1,300 ($500 airfare + $400 lodging + $400 meals). So you save $800 with just a slight change in travel plans.

Tip: The IRS has said a taxpayer in this situation can deduct lodging costs and 50% of the meals for all four days if he or she is staying longer to qualify for discounted airfare. It doesn’t matter if the extra day is just spent relaxing.

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