Taxes could complicate a simple overseas business trip

Many of you may travel to foreign countries for both business and personal reasons. Consequently, it is important to be aware of the rules governing what can be deducted with respect to foreign business travel.

When traveling outside the United States for business, what can be deducted depends on how much of the trip is dedicated to business and how much is personal travel.

For instance, if the trip is entirely for business purposes, you can deduct all the travel costs, plus meals (at 50 percent), lodging, and some incidental costs such as laundry and dry cleaning.

If the trip is primarily personal, however, none of the costs of travel to and from the destination are deductible, even if some time is spent on business. Lodging, meals, etc. would be deductible, though, for those business days.

The rules are more complex if the trip is primarily but not entirely for business.

In this case, unless an exception applies (as discussed below), the costs allocable to the personal, or vacation, part of the trip cannot be deducted. For example, if the trip covers 10 days — four personal and six business days — meals, lodging, etc. are only deductible for the business days. Furthermore, only 60 percent of the travel costs (airfare, for instance) are deductible, reflecting the fact that only 60 percent of the days of the trip were business days.

However, if the primary purpose of the trip is business and the trip does not last more than a week (seven consecutive days, not counting the day of departure, but counting the day of return), accounting for a portion of the travel costs as nondeductible is not necessary.

If the trip does last for more than a week, no allocation is required if the personal days total less than 25 percent of the total days spent on the trip. For this purpose, the total days of the trip includes both the day of departure and the day of return. Even if business is conducted on only part of a day, it’s counted as a business day. Business days also include days spent traveling to or from a business destination and weekend days or holidays falling between two business days.

Consider this example: Frank flies to Paris on a Monday primarily for business reasons. He spends Tuesday and Wednesday vacationing and then spends Thursday, Friday, and the following Monday through Thursday on business before flying home Friday. Counting the days of return and departure, it’s a 12-day trip. Only the first Tuesday and Wednesday are nonbusiness days. Thus, less than 25 percent of the trip is personal (2 of 12 days). Except for meals and lodging costs for those two vacation days, the rest of the meals (at 50 percent) and lodging, and all of the travel costs (airfare, etc.) are deductible. The travel costs need not be allocated between personal and business because of the 25 percent rule.

If you don’t meet the one-week or 25 percent test, you may still be able to deduct all of the travel costs if you can show that the chance to take a vacation was not a major consideration for the trip. Of course, the larger the vacation portion, the more difficult it will be to make your case.

If you travel by ocean liner, cruise ship, or other form of luxury water transportation, the rules are very restrictive.  Please contact our office for details.

As you can tell from the above discussion, the tax implications of foreign travel can be quite complex, depending on the nature of the trip. If you have questions about whether your planned foreign travel will be deductible for income tax purposes, please call our office.

Recent Articles:

Follow Antares CPAs:

Succession & Transition Strategies

Creating a successful succession plan is about protecting the future of a business and/or brand and ensuring there is a strategy in place to ensure your business continues to thrive.

After years of investing time, money and other resources, it’s imperative to prepare for this next stage in business and life. Poor planning can increase risks for stakeholders and tarnish legacies. Let’s make sure the next generation is well-equipped and ready to take your life’s work and family legacy to an even greater level of success.

Each situation is unique because the needs of each one involved are unique. We carefully review each opportunity to determine how best to structure a transition while meeting your goals, complying with any brand licensing polices and minimizing the tax implications of the transfer.

  • Next generation succession planning
  • Retirement planning
  • Wealth management

Let's get started.

Call us at 770.785.7855 Or email

Technology Services

Antares Group’s technology team provides convenient hardware and software support, along with comprehensive cloud accounting services with 24/7 access to up-to-date financial information exactly the way you want it, on any connected device, with a customizable dashboard interface. We use best-in class cloud accounting platforms and software including Sage Intacct, and robot process automation (RPA) with integration capabilities with some of the leading point-of-sale, payroll, and business operations management software programs.

Cloud accounting is just the beginning; Antares Group’s experienced technology team also performs system evaluations and makes recommendations for products and services that will help your business run more efficiently, as well as protecting your information and infrastructure with robust security options. Using the right technology for automation will simplify your life and keep your valuable data safe..

  • Technology and security optimization
  • Complete cloud accounting services
  • Computer troubleshooting assistance with remote and onsite repair

Let's get started.

Call us at 770.785.7855 Or email

Business Planning & Valuation

An accurate understanding of your company’s current value and financial viability is vital for achieving business success and the launch pad to boundless possibilities in the years to come. Realistic valuations are essential for long-term strategic plans, business successions and expansions, gift and estate planning, and a lucrative retirement package. Planning for where you want to go in the future is what our business and tax advisors do best. Whatever your goals, we are here to provide you with the right plan and insightful guidance to achieve it.

  • Trend reporting and analysis and business valuation
  • General business and start-up consulting
  • Major reinvestment planning
  • Cash flow projections

Let's get started.

Call us at 770.785.7855 Or email

Back Office Solutions

In such a fast-moving business environment, business owners need every advantage to succeed. Improving efficiency should be an ongoing part of your strategy for financial success, empowering you to make continuous improvements.

Whether your business is a single location seeking to grow effectively and sustainably, an established franchise brand adding new locations, or something in between, Antares Group provides a suite of back office services and the financial expertise to help business owners and managers achieve their operational and financial goals. In the process of supporting your essential back office operations with practical solutions, we analyze the function and effectiveness, looking for inefficiencies and potential liabilities, offering valuable insights for owners and managers.

  • Daily deposit verification and online banking monitoring
  • Process invoices and code general ledger accounts
  • Process vendor payments and file 1099s
  • Prepare and file sales and use tax returns
  • Reconcile bank, credit card and cashless sales accounts

Let's get started.

Call us at 770.785.7855 Or email

Tax Advisory

Minimizing your tax burden is a year-round strategy; planning for and preparing complex business and individual tax returns is where Antares Group excels. Beyond simply helping you fulfill basic tax obligations, you can rely on our tax advisory team to keep you informed of ever-changing regulations and keep you in compliance. We conduct regular reviews to make sure all methods of reducing your tax liabilities are being used. We routinely assess your personal income tax situation and cash flow to guard against the unexpected. This ongoing strategic analysis empowers you to maximize tax savings and capitalize on new opportunities.

In addition, we provide advisory services for new business startups, acquisitions, and dispositions. Through careful analysis, we help clients determine the best structure and make the process as seamless as possible.

  • Business and individual year-end tax returns
  • Personal property, gift, and trust income tax returns
  • Fixed asset setup and maintenance
  • Annual tax planning and preparation

Let's get started.

Call us at 770.785.7855 Or email

Cloud Accounting

Whether you run a small closely held business or a large franchise operation, maintaining a firm grasp of accounting and bookkeeping can be challenging. Between managing staff and overseeing daily operations, there is not enough time to dig into the books and make sense of the financials. You need to know the facts and the implications. – having precise, up-to-date information at hand means you always know your financial position so you can make informed decisions that keep your business moving forward.

The financial experts at Antares can create a custom menu of accounting and tax services perfectly catered to your business needs, including accurate and timely financial statements and reports, so you are always prepared to respond quickly to changing and challenging circumstances. Along the way, we provide clear feedback and financial guidance to help you predict trends and recognize issues, then make the necessary adjustments to sustain cash flow throughout the year.

  • Timely preparation of financial statements based on your particular needs
  • Complete preparation of sales, payroll, inventory, accrual, and prepaid journal entries
  • Meticulous monthly bank and credit card reconciliations

Let's get started.

Call us at 770.785.7855 Or email