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Saturday night’s all right for traveling

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in Small Business Tax

If you travel extensively on business, you know the drill:  Airlines may offer lower rates if you stay over a Saturday  night. The discount is usually worth it if you’re wrapping up  business on Friday.

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)

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