Tax Rules for Hybrid Travel

Tax Rules for Hybrid Travel
Categorized as ASCEND Business Advisory, Taxes Tagged

Wondering about combining business and leisure on your next getaway? Tax rules for hybrid travel can help you achieve the benefits of claiming business expenses while also enjoying some personal downtime while away. The term “bleisure” was widely adopted and used prior to COVID-19 but has suffered since with the lack of travel. Many millennials are trying to revive the practice as a healthier way to conduct business claiming the combination of work with some vacation time makes for a happier and more productive workforce. 

What Is “Hybrid Travel”? 

Hybrid travel is a way of using business travel practices along with personal time mixed in to create more fulfilling work-on-the-go experiences and productivity. It allows for leisure downtime on business trips in a way that still remains within the boundaries of travel expense claims and tax deductions.

Can A Trip Be Tax Deductible? 

According to IRS Publication 463, trips can be tax deductible as long as it is concluded that the claimed expense was necessary for business.

Are vacations tax deductible in 2021?

If travel away from home can be proven to promote or maintain business contacts, and/or be directly related to the business’ sustainability, a vacation may be deductible. Client, employee, or recruitment getaways and accommodations can be gifted as company deductions if they are used for business relations.

Is fuel considered a travel expense? 

Fuel can be deducted as an actual car expense in lieu of using the standard mileage rate but must be divided between personal and business use when filing. Some may qualify for both so the IRS recommends figuring out which formula works best for a return.

What Travel Expenses Can I Claim?  

The IRS states the following can be deducted “…as ordinary and necessary business-related expenses.”

  • Travel
  • Non-entertainment-related meals
  • Gifts
  • Transportation

Although meals are usually only covered at 50%, the IRS states, “You can deduct 100% of your meal expenses if the meals are food and beverages provided by a restaurant, and paid or incurred after December 31, 2020, and before January 1, 2023.” 

How Do I Prove Travel Expenses For Taxes?

Keep an account book, log, statement of expense, or similar record along with receipts, bills, or canceled checks to prove your claims. 

Climate sustainability is a top consideration for many companies to lower impact on the environment by extending trips versus an individual traveling for two separate occasions. According to a Global Business Travel Association survey, “Ninety percent of respondents say employees are more (30%) or equally as interested (60%) in bleisure travel – adding vacation days to their work trips – compared to pre-pandemic times. And although 36% say their company’s travel policy expressly allows bleisure trips, 49% their policy does not, but employees are often allowed to take these trips in practice.” 

With so many loopholes and policy changes, having professional help along the way will reduce mistakes and ensure the best possible return on your investment. Contact us today at 888-297-3321 and let the William Rogers Company help manage your bleisure travel taxes.