Now that summer has arrived, you may find opportunities to combine business activities with pleasure, which could result in tax breaks. Here are five of those potential breaks.
- Organize a company outing.Normally, deductions for business entertainment and meals are limited to 50 percent of the expenses. However, you can write off 100 percent of the cost of a company picnic or other get-together. Note that you can’t restrict the outing to only a select few employees.
- Take a mini-vacation.If you’re traveling on business, you might extend the trip a few days to get in some sightseeing. Generally, you can deduct your travel expenses — including airfare and 50 percent of your meals — if the primary purpose of the travel is business related. But you can’t deduct expenses for your side trips.
- Send the kids to camp.When you send your children who are under age 13 to day camp so you and your spouse can work in the summer, you may claim the dependent care credit for the expense. Usually, the maximum credit is $600 for one child and $1,200 for two or more children. The cost of overnight camp doesn’t qualify.
- Lease your vacation home.If you rent out your vacation home when you’re not using it, you often can deduct your rental expenses in full. Deductions are limited to rental income if your personal use for the year exceeds the greater of 14 days or 10 percent of the rental time. Note: There are no tax consequences for a rental of two weeks or less.
- Fish for deductions.Although you can’t claim deductions for an entertainment facility, like a boat, you may still write off 50 percent of entertainment expenses relating to the facility. For instance, if you take a client deep sea fishing after a substantial business meeting, you can deduct the fuel, food, and drinks — even the fish bait.
These are just five possibilities, but it’s important to be aware of exclusions and limitations that may apply to your situation. Have questions? Please give us a call today. We are here to help!