Making a trip tax deductible ....
I have looked through this folder and have not found any posts in regards to this topic so if anyone finds anything.. please do post the link. 8)
Also, whilst I am Australian.. this is a question this is relevant for anyone from any country in the world so please do respond in re: to how this would work for you (your country)... 8) :D
Okay.. :) I am planning on a week-long trip to Las Vegas either in late March or anytime in April this year (within the current financial year in Australia).
My main reason for choosing the location of Las Vegas for this trip is because of http://www.dancerwealth.com - the one day training for dancers. 8)
I have thought it thru and since my club operates similiar to the clubs in Vegas.. this training will benefit me ;D (there will probably only be small parts that won't be applicable to me due to being Australian).
Now.. will only a small percentage of this trip be tax-deductible or can I claim the full week (5-6 nights) of the trip as a tax-deduction since I will be attending the training whilst there (and it is the main reason I'm going to Las Vegas)... ??? I'm going over mainly "for business" (the dancer wealth training) however the side benefit is that I will be there for up to a week hence it will also be a holiday (in a way).... 8)
Will I be able to claim the trip as a tax-deduction.. ???
I know I'm able to claim the training as a tax deduction however what else will I be able to claim.. ???
I will consult my own accountant in regards to this and post a follow up (just FYI). :-*
Re:Making a trip tax deductible ....
Well, I can only answer this assuming that Austrailian tax laws are similar to U.S. Tax Laws. If that's the case, for the most part the trip should be deductible. Clearly the course tuition is deductible, as will be the airfare to and from the U.S.A. Your hotel is a bit trickier. There are IRS rules on how many of the days would be considered business travel days. Normally you can take any travel days, plus weekends. So, lets say you arrive in Las Vegas on a Friday. Friday is a travel day, so that lodging would be deductibe. Saturday and Sunday are weekends, so they are deductible, too (Sunday is also class day, so it would definitely be deductible). Lets say you fly back on Wednesday. In that case, Monday and Tuesday would be considered personal days, and you wouldn't get a deduction. Wednesday would be a travel day, so it would be business related, so deductible. So, of the 6 days (Friday - Wednesday), 4 would be deductible. This is off the top of my head before I get to the office, however if you IM me I can probably get you more info on this. Frankly, I have to re-check the meals rules almost every time I run into these situations.
And let us know when you're going to be here!
Re:Making a trip tax deductible ....
In my experience, in America the IRS tends to let virtually every deductible expense slide providing that I am actually working on all non-travel days (with one day off i.e. Sunday). When I have taken trips were more than 1/2 of the days were non-working, the IRS really took a hard look at my expenses and they tried to make the argument that the trip was really for vacation purposes not business, with a one day seminar/trade show/producer meeting or other non-paying venture merely being used as an excuse to attempt to claim a vacation trip as a business expense. I have no idea how Australian authorities interpret such matters, but if you were a US citizen I would highly recommend that you actually dance for a few nights in Vegas (since a PAYING gig legitimizes the business nature of the trip).
Re:Making a trip tax deductible ....
Thanks for the responses as I posted this for everyone not just me.
I just wanted to make most of the trip a tax deduction since I will be forking out alot of $$ in just airfare to go over.
Info. about Australia's legal and tax system.... According to "Own your own company" by Garrett Sutton...
--pg 41-- Australia's legal system is unique. Based significantly on the British Parliamentary model, it also adopts features of the U.S. system.
--pg 42-- In Australia, businesses will be taxed both at a Commonwealth and a State level. There are different taxes imposed at each level.
This information is just FYI. I will be contacting my accountant this Monday in re: how much and little and what is tax deductible about this trip.
Re:Making a trip tax deductible ....
Can you let me know what your accountant says as I am planning a 'working holiday' also.
Thanks
Re:Making a trip tax deductible ....
Here is an update. It took long as my accoutant (the firm) has quality control and makes sure what they are sending me is factual and correct.
TRAVEL DEDUCTIBILITY
Travel expenses generally are deductible if they are incidental and relevant to you earning assessable income. It is fair to say that the course in Las Vegas is relevant to you earning income.
Travel expenses for overseas travel are deductible if the purpose of the trip is for the purpose of keeping ahead, or attending conferences etc., I understand from your facts that the main purpose of the trip to Las Vegas is to attend the Dancer Wealth Training course. Items that would be deductible to you include air fares, accomodation and food. As you would be
staying in Las Vegas for a few days which would include business and pleasure, you would need to apportion the accomodation and food expenses to
take out any private portion (for e.g. if the course is on Friday, then accomodation on that night would be deductible, but accomodation over the weekend would be private and not deductible).
Costs for passports and travel insurance are generally not deductible.
To claim the deductions, you would need to keep the following records:
* Written evidence would need to be obtained for all expenses claimed.
* This includes invoices and receipts for travel, accomodation, meals etc.;
* If you stay in Las Vegas for 6 or more nights, then a travel diary needs to be maintained. I understand that you would be staying for less than this, therefore you do not need a travel diary.
I am planning a 4 day and 3 nights trip: arrive Sat, training Sunday, leisure Monday (hence this day is not tax deductible) and leave Tuesday. This will cut down my expenses associated with the trip and make sure that only one day is not deductible.
You will need to approach an accountant to find out about travel diaries as I do not need to know this information at present (my travelling isn't that long).
If anyone knows what a travel diary is (according to your own country) -- please do reply
;D Hope that helps
Travelling to other clubs to work (Australia)
[tt]In general, travel expenses aimed at obtaining new agencies or assets, or otherwise expanding the business structure, are non-deductible, while travel expenses in seeking new marketing or manufacturing trends, ie in keeping abreast or ahead, are deductible. [/tt]
In more simplier words, if I am going overseas to keep myself "abreast or ahead" of the latest trends (etc) in re: dancing (which it is.. hence expanding my skill base)... then it is deductible. Working in the same environment for year after year will only make me stagnant and definately not keep me "abreast or ahead".
[tt]The Commissioner's view appears to be that, where the main purpose of the trip was the gaining or producing of income, the related expenses will be fully deductible under ITAA97 sec 8-1 notwithstanding the existence of an incidental private purpose.[/tt]
My purpose for travelling to other states and overseas is purely for employment and to expand my experiences hence update my skill base as a dancer. Knowing how to work in different club environments both within Australia and overseas will allow me to be able to increase my chances of producing income as I will be able to work anywhere instead of being restricted to one type of work environment. So based upon the above quote, "my main purpose of the trip was the gaining or producing of income" hence the trips are fully deductible.
Apportionment of expenses incurred in the trip is subsequently 100% as I will only be travelling for work (income producing activities) and NOT for leisure. The only time this apportionment of expenses incurred in the trip is less is when some of the purpose of the trip is personal.
[tt]SUBSTANTIATION OF OVERSEAS AND DOMESTIC TRAVEL
Special substantiation rules apply to expenses in relation to overseas and domestic travel (ITAA97 Div 900: sec 900-1 to 900-250).
The effect of the substantiation rules is that domestic and overseas travel expenses are not deductible unless the following two conditions are satisfied:
(1) Written evidence (16-340) must be obtained by the taxpayer in respect of expenses relating to travel, regardless of length of absence from home. In the case of a business travel expense (ie a travel expense incurred in producing income other than salary or wages), written evidence need only be kept if the travel involved at least one night away from home.
(2) Travel records (ie a travel diary or similar document) must be kept by a taxpayer where the taxpayer was away from the ordinary place of residence for six or more consecutive nights. The records must contain particulars of each business activity undertaken during the relevant travel. Entries must be made before the activity ends or as soon as possible afterwards, setting out: (a) the nature of the activity; (b) the day and approximate time when it began; (c) how long it lasted; and (d) where the activity took place.[/tt]
In other words, since my trips will be basically 100% tax deductible or close to it... KEEP ALL MY RECEIPTS!
Be very aware tho' that I won't be able to claim any expenses incurred between travelling from wherever I'm residing to work and back again.... only when I travel between two places. As your accountant for more information.
Once again, whilst I got my information from my accountant... please consult your own to confirm this information is correct.
8) :D ;D