Business and trade conventions are an important part of business life. But before you pack your bags, be sure you understand what your business can and cannot deduct. Here are a few things you can and cannot write off, so you can make the best choices with your budget.
Deduct Your Booth. Advertising and marketing expenses often include selling at a convention. A trade booth, the signage around it, speaking costs, and expenses for your personnel to staff the booth are generally all deductible in your marketing budget. If you attend a convention, this is always the best way to ensure that you get the most benefit from it and that your expenses are the most fully deductible on taxes. It may also save your company money in the long run.
Deduct Domestic Costs. Generally, attending a closely related convention within your business industry or field is deductible as a travel expense. This would usually include the cost of tickets as well as reasonable and usual travel costs. Keep records of all employee or owner expenses related to the convention as well as a calendar and record of your attendance. As with just about any business travel, the primary purpose of the travel should be business and not pleasure.
Be Wary of Cruises. Want to sign up for a cruise with a business convention involved? Be careful with this deduction. Cruise travel with a business purpose is limited to $2,000 (as of 2018) and must have a bona fide business purpose. Keep information on the convention to demonstrate how the program benefited your company or affected the employee's job duties.
Be Wary of Foreign Travel. Traveling to a trade show in Europe or Asia? Be prepared to show that the travel was pretty much entirely for business purposes. Foreign travel to a convention must have about 75% business purpose and very limited personal enjoyment to be deductible. If you keep the trip to less than one week and stick with a business purpose, you won't generally have to allocate costs between business and personal expenses. This will make record keeping and taxes much easier.
Not sure if your convention plans will qualify to be deducted in 2019 or beyond? Speak with an accounting professional to learn more. With tax law constantly changing, any business owner or manager is smart to stay abreast of accounting dos and don'ts when making plans for the upcoming year.Share
6 March 2019
Accounting is the absolute most important element of running a business. If you mess up the bookkeeping even the slightest bit, the entire business could be in trouble. I know how costly a small bookkeeping error can be. About three years ago, I made a seemingly small mistake in the financial records for my business and the next year when I filed my taxes, things were very bad for me. What would have required a small tax payment had suddenly turned into a big tax bill and quite a headache. Since then, I have worked with an accountant and things have been better.