The IRS has very different rules for deducting foreign business travel and for deducting domestic business travel. This month, we’ll focus on FOREIGN business travel, and will follow up next month with the rules for deducting DOMESTIC business travel.
First, in order to deduct the full cost of transportation to a foreign country, at least 76% of your days must qualify as Business Days. There are 3 types of Business Days:
- Working Days
- Sandwich Days
- Travel Days
A Working Day is defined as a day in which you work at least 4 hours and 1 minute on business. In addition to this, there must be a business reason why you had to work at this location instead of at your normal location. For example, maybe you needed to meet with a supplier, customer, or vendor. Or maybe you were attending a conference, or scoping out a future business location.
Sandwich Days are defined as days in which you only eat sandwiches. Just kidding, that would be too easy. Sandwich Days are Saturdays and Sundays that are sandwiched between a Friday Working Day and a Monday Working Day. So this means that if you work on Friday and Monday, then you can still deduct your lodging and meals on Saturday and Sunday, even if all you do is sightseeing! So maybe it is pretty easy after all.
And then the best part is that Travel Days also count towards the 76% Business Days test, so long as you’re traveling for at least 4 hours and 1 minute, and of course that there’s a business reason for your travel to the foreign country.
So there you have it. If you meet the 76% test and document your itinerary, daily time records, business purpose for traveling, and copies of receipts, you can DEDUCT YOUR FULL TRIP! (airfare, ground travel, lodging, meals, internet, tips, etc.) (But not your sightseeing entrance fees or other entertainment costs.)
So the next time you’re traveling internationally for business, text a picture of you eating a sandwich on one of your sandwich days to 520.321.4626 so we can share your story!