If your trip will keep you out of the United States for less than seven days, you can deduct the round-trip airfare to and from the foreign destination and the cost of the stay on days that you conducted business, but not on days that you didn't. Also, do not count the day you left the U.S. as a day abroad. If your trip is more than a week, count the day you left the U.S. as a day abroad. If the number of days you did not work counts for less than 25 percent of the trip, you may deduct the round-trip airfare, meals (50 percent), lodging and other incidentals, according to Greta P. Hicks, a certified public accountant. You must always allocate if the trip is a mix of business and non-business.
If you conduct business while on vacation, you can count as a business day any day in which you were required to be at a particular location to conduct business or spent at least half of a normal, eight-hour workday doing job-related activities. Business days can also include days in which you cannot work because of illness, accident or cancellation; and weekends, holidays and stand-by days, as long as they fall between workdays. If you stay at your destination after a workday on a weekend or holiday for non-business reasons, it is not a workday.
Hicks recommends all business travelers keep a specific log of their business activities for tax reasons. That includes who you met with, notes on what business was conducted, when it was and how long the business activity lasted, where the business activity took place and why it took place.
Jeff Schnepper, an MSNBC columnist, says rules on foreign conventions make it harder to deduct those costs. On a basic level, travelers must prove the convention had to be held overseas. The factors include the purpose of the meeting and the activities during the meeting; the purpose of the group that hosts the convention; and residence of active members and locations of future conventions.
Schnepper says the rules are just as hard for conventions held aboard cruise ships. Taxpayers must prove the convention or meeting is directly related to your trade, the cruise ship is registered in the U.S. and all ports of call are in the U.S. or its possessions. The maximum deduction is $2,000 and two returns are filed---one by the taxpayer showing a copy of all business activity and one by the sponsoring organization showing the convention's schedule and proof the taxpayer attended those meetings.
