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151. How to Deduct Your Vacations as Business Travel Expenses

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In this episode, Thomas Castelli explains how you can deduct your vacations as business travel expenses!

As an investor, you may be traveling to new markets outside of your tax home to determine whether or not a certain market is suitable for investment.

And unfortunately, traveling to these new markets generally isn't going to be tax-deductible until you actually acquire a property in that market.

The good news is once you acquire a property within that market, future travel expenses generally become tax-deductible in the year that you incur those expenses because you now have a business in that market.

Expenses that are tax-deductible when traveling outside of your tax home include airfare, train tickets, bus tickets, and mileage if you're traveling by car.

In addition to that, you can also deduct expenses from overnight stays in a hotel/BnB, travels to and from the airport and lodging area, meals, and other necessary business expenses. 

In order to deduct vacations as business travel expenses, you have to:

  • Make sure that your trips are primarily for business purposes and that you're spending less than 25% of your trip on personal activities. 

  • Determine whether each day you're traveling is a business day or a personal day. Business days include days when you work more than four hours or when you are traveling to your destination.

  • Take note of the sandwich rule, which makes weekends business days if it's impractical, either due to time or expense, and traveling back and forth between your home and the business destination between Monday and Friday.

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