 Busness Vacations
By Marilyn Webb owner of Travels To Imagine
One of the positive elements of owning a small business is the opportunity of
utilizing tax benefits wherever possible. Travel is an area in which tax rules can be used
to the small business owner's advantage to convey a benefit while taking a tax deduction.
You can maintain a large discretion about travel destinations, and methods and times of
travel. With careful navigation of the rules and proper tax planning, a small business can
maximize tax deductions relative to travel and entertainment.
Integrating some vacations into a business trip, such as convention,
conference, seminar or business meeting, is one way to subsidize your travels. However,
when your travels include both business and vacation, only part of the trip may be
deductible. If your travels are primarily for business, you should be able to deduct the
entire cost of getting to and from the destination. If you can
establish that your attendance will benefit or advance the interests of your trade or
business, then travel expenses incurred for travel to conventions, seminars, and similar
business meetings are most often deductible. Conventions, seminars or similar meetings
held aboard cruise ships are also deductible. Many cruise lines offer industry specific
cruises and seminars at sea. There are many opportunities for a wide spectrum of business
and customized conferences that can be arranged for groups through land or cruise
packages.
Educational travel should also be explored. The cost of seminars,
conferences or training relating to your business is usually deductible. Continuing
education courses may offer another opportunity for deductible travel. Costs to the
seminars are deductible provided the education and training is needed to maintain or
upgrade skills in your current job and education is the main purpose of your trip.
It is important to know the rules and keep all the required
documentation to substantiate the deductions. The expenses must be reasonable and must be
ordinary and necessary to the conduct of the business. You should employ the services of a
professional and keep the original records to provide them with appropriate required
information. Accurate records are essential, and the easiest way to keep them organized is
to separate your business travel and entertainment expenses from your personal ones.
Concise record keeping is essential for travel, lodging, entertainment and meal
deductions. Records should show that time is spent with business clients, and they should
include seminar schedules and/or other related information regarding activities dealing
with your business.
Planning and documentation is key. Get in the habit of recording every
transaction related to business travel and entertainment. Purchase a travel diary and
record all expenses. This can encompass a wide variety of expenditures and the reason for
expected benefits from your expenses. Any system of tracking travel and entertainment
expenses will suffice, but the more detailed it is, the better.
While I cannot offer you tax advice or interpretations, I can suggest
several sources for the most current information. The following is a list of Technical
News Bulletins available from Revenue Canada. Visit their website at www.rc.gc.ca to
acquire these or phone their office at (403) 233-5131.
- IT131 Training & Educational Costs
- IT357 Expenses of Training
- IT131 Convention Expenses
- IT581 Food, Beverage & Entertainment
- IT522 Vehicle, Travel and Sales Expenses
- IT470 Various Types of Fringe Benefits
- IT63 Personal Use of an Automobile
Knowing the rules allows you to maximize deductions for the expense of
travel. Travel and entertainment costs are expensive so you
should do all you can do to preserve deductions and maximize the
benefits of your travel expenses.
Marilyn Webb, owner of Travels To Imagine, offers Leisure &
Corporate Travel, Cruises & All-Inclusive Tours; specializes in Holistic Travel,
Retreats & Spiritual Adventures. 403 247-0972 or
email: mjwebb@telusplanet.net
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