I love being in business for myself. One of my favorite aspects of being self-employed is that business travel is deductible from my business income. As long as the primary purpose of the travel is business, with a few exceptions, all my travel expenses are deductible. I have visited many US destinations on business, next, I need to find clients in other parts of the world so I can travel there! Is there anyone in Spain who needs a U.S. tax return prepared?
The rules for business travel are fairly simple. If the primary purpose of your trip is business, you can deduct all your expenses to get to your destination, and all your food, lodging, and incidental expenses related to the business purpose of the trip. So for example, if I go to San Diego for a tax seminar and spend 4 days in the seminar, and 2 days visiting friends, then my airfare is 100% deductible, as well as my lodging and food while I was attending the seminar.
It is important to understand that “Primary Purpose” is determined by how much time you actually spent on each activity, not your main reason for taking the trip. So if I had spent 4 days visiting with friends, and 2 days in seminar, then the primary purpose of my trip was visiting friends, and my airfare and other transportation costs are not deductible. I can still deduct lodging and meals for the 2 seminar days and other direct seminar expenses. For travel within the United States, transportation costs are all or nothing. In the example above, I spent 1/3 of my time on business, but I cannot deduct 1/3 of my transportation costs.
For travel outside the United States, the rules are a little different. When traveling for business outside of the United States, if the primary purpose of your trip is business, you can still deduct all your business related lodging food and incidental expenses, but you have some non-business days, then you MUST prorate your transportation costs and the non-business percentage is not deductible. And just like for domestic travel, if the primary purpose of your trip is not business, then none of your transportation cost are deductible. The good news is, for business travel purposes, travel days, certain weekends, and some holidays are counted as business days, even if you are not attending a business event on those days.
Now back to my travel to Spain. When I find my perfect client in Spain, I am going to want nice lodging at an affordable price. While searching the internet I found a site for Holidays in Spain. There I found that Granada, in the south of Spain, is one of the best tourist destinations. In Granada you can find the Alhambra, a Moorish Citadal and palace. Seville, is the artistic, cultural, and financial capital of Southern Spain. In Seville you can find City’s Cathedral which is one of the largest of all Medieval and Gothic cathedrals. And in Malaga you can find Gibralfaro castle which provides stunning views of the city. I think it might be nice to attend a tax seminar in a nice Spanish Castle!
As always, this article is intended as just general information and may not apply to your particular tax situation. Please consult with a tax professional (preferably an Enrolled Agent) about your particular tax situation.