Can you deduct the costs of a spouse on a business trip?

deduct business trip costs

If you own a business and often travel for it, you may wonder if you can deduct the costs of having your spouse accompany you on the trip.

The requirements for claiming a spouse’s travel expenses are incredibly tight. First and foremost, your spouse must be a legitimate employee to qualify. This rule implies that you can’t deduct a spouse’s travel expenses, even if their presence is for a legitimate business reason. In most circumstances, this criterion prevents tax deductions.

A spouse-employee

If your spouse works for you, you can deduct their travel expenses. That is, as long as their participation on the trip is for a legitimate business purpose. It’s not enough to have your spouse do an incidental business service to demonstrate a commercial purpose. It’s not enough for their presence to be “useful” to your commercial endeavors, like typing up meeting notes. It has to be vital.

In most circumstances, a spouse’s involvement in social occasions is insufficient to demonstrate a business motive. That would include serving as a host or hostess. For instance, if their goal is to build a positive reputation among consumers or associates, this is frequently insufficient. Furthermore, if the trip includes a holiday component, establishing a professional objective for their attendance on the trip will be more challenging. For example, if your spouse spends time touring. On the other hand, a legitimate business objective exists if your spouse’s presence is required to care for a critical medical condition you have.

If your spouse’s travel meets these criteria, you can claim the standard deductions for business travel away from home. The standard deductions include transportation, meals, hotel fees, and incidental costs like dry cleaning and phone calls.

A non-employee spouse

But what if your spouse’s travel does not meet the criteria? You may be able to deduct a significant percentage of the trip’s costs because the rules do not force you to contribute 50% of your travel expenses to your spouse. You must budget for any additional expenses you incur for them. For example, in many hotels, the cost of a single room isn’t much less than that of a double room. If a single room costs $150 per night and a double room costs $200, your spouse is only responsible for $50 of the total cost. In other words, you can deduct the amount you would have spent if you had traveled alone. To establish your deduction, request a room rate schedule from the hotel that shows single prices for the days you’ll be staying.

Whether you drive your car or rent one, the entire expense is deductible, even if your spouse is accompanying you. However, suppose you utilize public transit and eat at a restaurant. In that case, any additional expenses made by your spouse are not deductible.

Deduct business trip costs

If you have any questions concerning this or other tax-related matters, please contact our RRBB accountants and advisors.

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