They say money can’t buy happiness…
But it can buy you a good CPA – which is basically the same thing in April.
Because on a serious note, it’s hard to have peace of mind about your Jersey Shore business’s finances if your taxes aren’t squared away. The threat of IRS penalties doesn’t generally lend to peace of mind, in my experience.
Your best move at this point (with the tax deadline only about a week away) is to file an extension. I’m here to make sure you get that knocked out by April 15th: calendly.com/shorefinancialplanning/the-first-step.
And yes, to address the topic crowning the headlines this week and last – tariffs are happening. I’ll speak more in-depth about this next week, but for now, begin considering where you can pivot in your Monmouth Beach business to react to possible increased costs.
I’m here not just as a business advisor, but as a strategist in your corner. My aim is to help you run the kind of forward-looking analysis that keeps your business steady in times like this.
One example of this kind of thinking, as you’re looking forward to Q2 and onward: Deducting expenses from your summer travel.
Because if you’re already planning some business travel (or could reasonably shape personal travel to have a business component), there are ways to legally deduct those expenses and make your vacation – or “work-cation” – a smart part of your tax strategy.
“A man says a lot of things in the summer he doesn’t mean in the winter.” – Patricia Briggs
I’ll just tell you upfront: To deduct your travel expenses, you do have to be *mostly* working while you’re away.
So, if you’re in need of a feet-up, sipping-a-beverage-on-the-beach kind of getaway with your family, take it. But don’t try to convince the IRS it was for “business purposes” – they’ll see right through it.
However, if you’re up for attending a conference, meeting with clients, or doing some market research in a more scenic location, here’s how to earn some tax savings while you’re at it (without getting into IRS trouble).
As I mentioned, to deduct your travel expenses, the main reason for your trip must be directly tied to your business. Meaning, more than 50 percent of your time must be spent on business activities (meetings, conferences, visits with suppliers, the like).
Also, you must be traveling away from what the IRS calls your “tax home” – the city or general area where your principal place of business is (not necessarily where your actual home is).
The IRS’s golden rule for deductible travel expenses: they must be “ordinary and necessary.” Ordinary, meaning a normal expense in your industry. And necessary, meaning it contributes to your work in a direct and meaningful way.
So, what is deductible?
Entertainment expenses, however, are not deductible – even if you spend the time with clients or colleagues. Family member expenses don’t make the cut either (unless they’re employees of your Jersey Shore business, or you can prove their presence is absolutely necessary for your business purposes).
If you book-end your trip with a few days of tourist activities, none of those expenses are deductible. And mixed days (part business, part personal) must be allocated proportionally.
Weekends between business days (Friday and Monday meetings, for example) can be counted as business days (making them deductible) if it’s more cost-effective to stay over. However, this will catch the IRS’s eye, so you need verifiable proof that your primary motive really was business.
Foreign travel, though, is a different story: If your trip is over 7 days and 25 percent (or less) personal, you can deduct all your travel costs. But for domestic travel (in the U.S., Mexico, and Canada), there’s no deduction for purely personal days.
The IRS will cross-check your deductions against industry norms – so be sure to keep ALL receipts, itineraries, agendas, email confirmations of meetings, and any other records you accumulate along the way.
To keep all the details straight, I always advise my clients to keep this information in the form of a daily log. Each day, note how many hours you spent on business or pleasure, how each business activity relates to your business, which clients or prospects you met, etc.
The more details you can track, the safer you’ll be. If you simply jot down “networking” over the duration of your trip, the IRS can disallow your claims and deny you the deduction.
Here’s a quick breakdown of how your business type affects how you deduct travel expenses…
Sole proprietorships and single-member LLCs: Travel deductions flow through to you personally and reduce your taxable income directly. No need for reimbursement, since the business and you (the owner) are legally the same.
Partnerships, S corps, C corps, and multiple-member LLCs: If you pay for your travel expenses, the business has to reimburse you under an accountable plan. Otherwise, they become non-deductible in most cases. For S corps, the company can directly pay for travel expenses and deduct them on Form 1120-S.
There’s another route you could go here – rather than getting reimbursed by the company for expenses, you can use per diem reimbursements (as long as you have an accountable plan). These are IRS-determined daily fixed amounts for meals, lodging, and any incidental expenses (like tips for hotel staff or baggage handlers).
A lot of C corps use per diem reimbursements, because they really help simplify the process – you don’t have to keep track of every receipt. Just make sure per diem reimbursements are part of your written accountable plan, and keep records that prove the time, place, and business purpose of your expenses.
I’ve seen a lot of business owners make innocent missteps here — so proceed carefully. Claiming the wrong expense (or even the wrong percentage of an expense) could put you at risk of penalties or an audit. So, if you want full confidence that your travel plans will hold up under IRS scrutiny, let’s talk:
calendly.com/shorefinancialplanning/the-first-step
Safe travels,
Joseph Vecchio