How to Deduct Jewelry Business Trip Expenses

Net Profits: Business-Related Trip Deductions

How much you can deduct on a trip that involves some business and some pleasure comes down to the primary purpose of the trip. Mix business with pleasure — I do this almost every time I travel — and deductions can get a little complicated.

A little common sense goes a long way. As a rule of thumb, on days when you do something that involves potential profit, you can deduct expenses. Just keep the receipts to show who you met with where and what you discussed.

Jewelry Business While in Hawaii?

Let’s say the primary purpose of your trip to Maui is a family vacation but you bring your jewelry into a couple galleries while there to talk to the owners about carrying your line. You can’t deduct airfare for the trip, but you can deduct your hotel, meals, and car rental for those days you conduct business.

Now, let’s say you decided to show at the Atlanta Contemporary Jewelry Show in November but stayed at your sister’s place outside the city to save hotel fare. Airfare is deductible. Five-star dining with your sister two days after the show ends is not — unless, maybe, your sister serves as your East Coast marketing manager (and you can document that).

How to Deal with 50/50 Travel Expense Split

What if half your trip is business and half personal? Here’s where it gets tricky. You take a five-day trip to Miami, meet with a jeweler to discuss a collaboration one day and spend the next buying supplies at a show — but tack on two days to visit your grandmother in Boca.

That’s two days business and two days personal. Can you deduct airfare? The answer is “no” if the personal part was during the week, but “yes” if you do your business on weekdays then fly back Monday morning after a weekend with Grandma.

“That’s because the government does not expect you to work on weekends,” says Joe Anthony, a Portland, OR-based enrolled agent and tax consultant. “A lot of us do, of course. A lot of us don’t have a thing called a weekend, but it’s not required.

“So you have to look at the circumstances of each case,” he says. “It can get complicated, so we look to the primary purpose of trip. Generally, if the primary purpose is personal, you don’t deduct airfare. But if you travel somewhere for five days and end up working on weekdays and relaxing on the weekend, I would deduct airfare.”


NET PROFITS is a regular feature about using the Internet for jewelry selling of special interest to those with a home-based jewelry business that appears in Lapidary Journal Jewelry Artist. Learn more in “Tax Tips for the Traveling Jewelry Artist” in the March 2017 issue.

CATHLEEN MCCARTHY has written about jewelry and business for Town & Country, Art & Antiques, Washington Post, and her own site, The Jewelry Loupe. Follow her on Facebook, Instagram, Twitter and Pinterest.

 

PHOTO: GETTY IMAGES


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