October '21

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74 THE SHOP OCTOBER 2021 SPECIAL REPORT: TRADE SHOWS then use whichever number is higher. This can be really handy in high per diem cities." The per diem option is often overlooked by business travelers. "Many people will deliberately keep their meal expenses low, because they are on a budget," says Cawley. "But then they forget that they have a right under the IRS code to take the higher per diem rate. As a result, they end up not getting their higher deduction." Meanwhile, are you planning to use your personal car to travel to the show? If so, you face another decision—whether to use the standard mileage rate or keep track of your actual expenses. The decision lies in how good a record keeper you are and how much hassle you want to put up with. Sometimes the stan- dard deduction is the easier option. PERSONAL TIME What if you spend some vacation or per- sonal time during your trip? How does that affect the deductibility of your expenses? An excerpt from IRS document 463 pro- vides some clarification. "You can deduct all of your travel expenses if your trip was entirely busi- ness-related. If your trip was primarily for business and, while at your business destination, you extended your stay for a vacation, made a personal side trip or had other personal activities, you can deduct only your business-related travel expenses." It's important to keep careful records about your journey, allocating correctly between business and personal time. "My overall tip is to be truthful," says Catherine Raker, an accountant with Cendrowski Corporate Advisors, Chi- cago ( "If it's really a personal trip and you do some business- related activities, don't write the whole trip off as a business expense." Expenses that are shared for business and vacation can fall into a gray area, according to Cawley. "Your airline fare might be disallowed if you spend two days of your trip on business and five days on vacation. On the other hand, your hotel bill for the specific two business days, and other direct expenses for the business portion of your trip, would still be deductible." Personal time often means the presence of a spouse—and expenses related to that individual's travel can complicate record keeping. Ordinarily such expenses must be separated from those of the business traveler and may not be deducted. There is one exception: "If you are trav- eling with your spouse who is participating for a genuine business reason in the event, then that individual's expenses are cov- ered," says Flemming. KEEPING TRACK Trade shows can be valuable resources for your business. By bringing together ven- dors and buyers in one place, they facilitate more buying activity and higher profits. Taking the time to document your activity when you travel to a show can help alleviate the costly impact travel and hotel expenses can have on your bottom line. "It can be hard to keep careful records when you are busy, but those records do help come income tax time," says Cawley. "Tracking your travel expenses when you attend a trade show can really pay off." New York City-based journalist PHILLIP M. PERRY publishes widely in the fields of business management and law. Trade Show Tax Deductions

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