Making Travel Less Taxing: Ask Scott

Thanks Scott - situation is similar to #2, but I'm curious about expenses to visit out of state investment advisor - I believe these would also be subject to 2% AGI with some allocation if trip is extended for personal time - Am I missing anything? Any suggestions how to do the allocation?

How would deductions work for a travel blogger? Can they deduct airfare/hotel/food as a business expense because they post a review of the product?

@RV - Expenses for the production of income, such as investment advisory fees, are deductible subject to the 2% limit. Travel expenses related to the production of income, though, are not specifically mentioned. I think deducting travel costs to meet with an investment adviser who is managing paper securities (that is, not real property, but intangible property such as a stocks or mutual funds) would be aggressive. On audit, the IRS agent would likely question the necessity of travel versus a phone conference. Compare a rental property where you may need to physically be there, and you can see the argument the IRS is likely to make.

Given that most taxpayers won't get to deduct such costs due to the 2% limit, this isn't a frequently litigated matter; thus, I know of no case on point, so I would rely on your CPA or tax attorney to make the best decision for you based on the level of risk you are comfortable.

If you were to take a deduction for the trip, the allocation is based on the purpose of the trip and the time spent on business and personal matters. If the primary purpose of the trip was business, then you can deduct all of the airfare cost, and you should allocate meals and lodging based on whether it's a business or personal day. For more info, check out my earlier posts on airfare and meals and lodging.

@Tim - If a hypothetical travel blogger were to view online reviews of airfare and food products as an integral part of his or her business, then I think perhaps such expenses could be considered ordinary and necessary in the course of their business and therefore deductible.

Lest anyone want to start a random blog to deduct all their travel costs, remember that the IRS presumes any activity in which you don't earn a profit inf or 2 out of 5 years to be a hobby and non-deductible.

Scott @HackMyTrip also responded to this question in the post "Your Tax Home (Away from Home) as follows:

February 19th, 2013 at 10:43 am
Scottrick said,
@johnnycakes – I know some travel bloggers deduct every penny of their travel expenses. I’m not comfortable going that far. A fair amount of mine involves visiting family with absolutely no relation to the blog.

Can a contractor (not employed) working out of state, take the per diem amount for lodging as a tax deduction? Or, must actual lodging expenses be used?