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Form1040x Publication 15-B - Introductory Material Table of Contents Future Developments What's New Reminders Introduction Future Developments For the latest information about developments related to Publication 15-B, such as legislation enacted after it was published, go to www. Form1040x irs. Form1040x gov/pub15b. Form1040x What's New Cents-per-mile rule. Form1040x The business mileage rate for 2014 is 56 cents per mile. Form1040x You may use this rate to reimburse an employee for business use of a personal vehicle, and under certain conditions, you may use the rate under the cents-per-mile rule to value the personal use of a vehicle you provide to an employee. Form1040x See Cents-Per-Mile Rule in section 3. Form1040x Qualified parking exclusion and commuter transportation benefit. Form1040x . Form1040x For 2014, the monthly exclusion for qualified parking is $250 and the monthly exclusion for commuter highway vehicle transportation and transit passes is $130. Form1040x See Qualified Transportation Benefits in section 2. Form1040x Same-sex Marriage. Form1040x For federal tax purposes, individuals of the same sex are considered married if they were lawfully married in a state (or foreign country) whose laws authorize the marriage of two individuals of the same sex, even if the state (or foreign country) in which they now live does not recognize same-sex marriage. Form1040x For more information, see Revenue Ruling 2013-17, 2013-38 I. Form1040x R. Form1040x B. Form1040x 201, available at www. Form1040x irs. Form1040x gov/irb/2013-38_IRB/ar07. Form1040x html. Form1040x Notice 2013-61 provides special administrative procedures for employers to make claims for refund or adjustments of overpayments of social security and Medicare taxes with respect to certain same-sex spouse benefits before expiration of the period of limitations. Form1040x Notice 2013-61, 2013-44 I. Form1040x R. Form1040x B. Form1040x 432, is available at www. Form1040x irs. Form1040x gov/irb/2013-44_IRB/ar10. Form1040x html. Form1040x Recent changes to certain rules for cafeteria plans. Form1040x Notice 2013-71, 2013-47 I. Form1040x R. Form1040x B. Form1040x 532, available at www. Form1040x irs. Form1040x gov/irb/2013-47_IRB/ar10. Form1040x html, discusses recent changes to the “use-or-lose” rule for health flexible spending arrangements (FSAs) and clarifies the transitional rule for 2013-2014 non-calendar year salary reduction elections. Form1040x See Notice 2013-71 for details on these changes. Form1040x Reminders $2,500 limit on a health flexible spending arrangement (FSA). Form1040x For plan years beginning after December 31, 2012, a cafeteria plan may not allow an employee to request salary reduction contributions for a health FSA in excess of $2,500. Form1040x For plan years beginning after December 31, 2013, the limit is unchanged at $2,500. Form1040x For more information, see Cafeteria Plans in section 1. Form1040x Additional Medicare Tax withholding. Form1040x In addition to withholding Medicare tax at 1. Form1040x 45%, you must withhold a 0. Form1040x 9% Additional Medicare Tax from wages you pay to an employee in excess of $200,000 in a calendar year. Form1040x You are required to begin withholding Additional Medicare Tax in the pay period in which you pay wages in excess of $200,000 to an employee and continue to withhold it each pay period until the end of the calendar year. Form1040x Additional Medicare Tax is only imposed on the employee. Form1040x There is no employer share of Additional Medicare Tax. Form1040x All wages that are subject to Medicare tax are subject to Additional Medicare Tax withholding if paid in excess of the $200,000 withholding threshold. Form1040x Unless otherwise noted, references to Medicare tax include Additional Medicare Tax. Form1040x For more information on what wages are subject to Medicare tax, see Table 2-1, later, and the chart, Special Rules for Various Types of Services and Payments, in section 15 of Publication 15, (Circular E), Employer's Tax Guide. Form1040x For more information on Additional Medicare Tax, visit IRS. Form1040x gov and enter “Additional Medicare Tax” in the search box. Form1040x Photographs of missing children. Form1040x The IRS is a proud partner with the National Center for Missing and Exploited Children. Form1040x Photographs of missing children selected by the Center may appear in this publication on pages that would otherwise be blank. Form1040x You can help bring these children home by looking at the photographs and calling 1-800-THE-LOST (1-800-843-5678) if you recognize a child. Form1040x Introduction This publication supplements Publication 15 (Circular E), Employer's Tax Guide, and Publication 15-A, Employer's Supplemental Tax Guide. Form1040x It contains information for employers on the employment tax treatment of fringe benefits. Form1040x Comments and suggestions. Form1040x We welcome your comments about this publication and your suggestions for future editions. Form1040x You can write to us at the following address: Internal Revenue Service Tax Forms and Publications Division 1111 Constitution Ave. Form1040x NW, IR-6526 Washington, DC 20224 We respond to many letters by telephone. Form1040x Therefore, it would be helpful if you would include your daytime phone number, including the area code, in your correspondence. Form1040x You can also send us comments from www. Form1040x irs. Form1040x gov/formspubs. Form1040x Click on More Information and then click on Comment on Tax Forms and Publications. Form1040x Although we cannot respond individually to each comment received, we do appreciate your feedback and will consider your comments as we revise our tax products. 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Form1040x 1. Form1040x Travel Table of Contents Traveling Away From HomeTax Home Tax Home Different From Family Home Temporary Assignment or Job What Travel Expenses Are Deductible?Employee. Form1040x Business associate. Form1040x Bona fide business purpose. Form1040x Meals Travel in the United States Travel Outside the United States Luxury Water Travel Conventions If you temporarily travel away from your tax home, you can use this chapter to determine if you have deductible travel expenses. Form1040x This chapter discusses: Traveling away from home, Temporary assignment or job, and What travel expenses are deductible. Form1040x It also discusses the standard meal allowance, rules for travel inside and outside the United States, luxury water travel, and deductible convention expenses. Form1040x Travel expenses defined. Form1040x For tax purposes, travel expenses are the ordinary and necessary expenses of traveling away from home for your business, profession, or job. Form1040x An ordinary expense is one that is common and accepted in your trade or business. Form1040x A necessary expense is one that is helpful and appropriate for your business. Form1040x An expense does not have to be required to be considered necessary. Form1040x You will find examples of deductible travel expenses in Table 1-1 , later. Form1040x Traveling Away From Home You are traveling away from home if: Your duties require you to be away from the general area of your tax home (defined later) substantially longer than an ordinary day's work, and You need to sleep or rest to meet the demands of your work while away from home. Form1040x This rest requirement is not satisfied by merely napping in your car. Form1040x You do not have to be away from your tax home for a whole day or from dusk to dawn as long as your relief from duty is long enough to get necessary sleep or rest. Form1040x Example 1. Form1040x You are a railroad conductor. Form1040x You leave your home terminal on a regularly scheduled round-trip run between two cities and return home 16 hours later. Form1040x During the run, you have 6 hours off at your turnaround point where you eat two meals and rent a hotel room to get necessary sleep before starting the return trip. Form1040x You are considered to be away from home. Form1040x Example 2. Form1040x You are a truck driver. Form1040x You leave your terminal and return to it later the same day. Form1040x You get an hour off at your turnaround point to eat. Form1040x Because you are not off to get necessary sleep and the brief time off is not an adequate rest period, you are not traveling away from home. Form1040x Members of the Armed Forces. Form1040x If you are a member of the U. Form1040x S. Form1040x Armed Forces on a permanent duty assignment overseas, you are not traveling away from home. Form1040x You cannot deduct your expenses for meals and lodging. Form1040x You cannot deduct these expenses even if you have to maintain a home in the United States for your family members who are not allowed to accompany you overseas. Form1040x If you are transferred from one permanent duty station to another, you may have deductible moving expenses, which are explained in Publication 521, Moving Expenses. Form1040x A naval officer assigned to permanent duty aboard a ship that has regular eating and living facilities has a tax home (explained next) aboard the ship for travel expense purposes. Form1040x Tax Home To determine whether you are traveling away from home, you must first determine the location of your tax home. Form1040x Generally, your tax home is your regular place of business or post of duty, regardless of where you maintain your family home. Form1040x It includes the entire city or general area in which your business or work is located. Form1040x If you have more than one regular place of business, your tax home is your main place of business. Form1040x See Main place of business or work , later. Form1040x If you do not have a regular or a main place of business because of the nature of your work, then your tax home may be the place where you regularly live. Form1040x See No main place of business or work , later. Form1040x If you do not have a regular or main place of business or post of duty and there is no place where you regularly live, you are considered an itinerant (a transient) and your tax home is wherever you work. Form1040x As an itinerant, you cannot claim a travel expense deduction because you are never considered to be traveling away from home. Form1040x Main place of business or work. Form1040x If you have more than one place of work, consider the following when determining which one is your main place of business or work. Form1040x The total time you ordinarily spend in each place. Form1040x The level of your business activity in each place. Form1040x Whether your income from each place is significant or insignificant. Form1040x Example. Form1040x You live in Cincinnati where you have a seasonal job for 8 months each year and earn $40,000. Form1040x You work the other 4 months in Miami, also at a seasonal job, and earn $15,000. Form1040x Cincinnati is your main place of work because you spend most of your time there and earn most of your income there. Form1040x No main place of business or work. Form1040x You may have a tax home even if you do not have a regular or main place of work. Form1040x Your tax home may be the home where you regularly live. Form1040x Factors used to determine tax home. Form1040x If you do not have a regular or main place of business or work, use the following three factors to determine where your tax home is. Form1040x You perform part of your business in the area of your main home and use that home for lodging while doing business in the area. Form1040x You have living expenses at your main home that you duplicate because your business requires you to be away from that home. Form1040x You have not abandoned the area in which both your historical place of lodging and your claimed main home are located; you have a member or members of your family living at your main home; or you often use that home for lodging. Form1040x If you satisfy all three factors, your tax home is the home where you regularly live. Form1040x If you satisfy only two factors, you may have a tax home depending on all the facts and circumstances. Form1040x If you satisfy only one factor, you are an itinerant; your tax home is wherever you work and you cannot deduct travel expenses. Form1040x Example 1. Form1040x You are single and live in Boston in an apartment you rent. Form1040x You have worked for your employer in Boston for a number of years. Form1040x Your employer enrolls you in a 12-month executive training program. Form1040x You do not expect to return to work in Boston after you complete your training. Form1040x During your training, you do not do any work in Boston. Form1040x Instead, you receive classroom and on-the-job training throughout the United States. Form1040x You keep your apartment in Boston and return to it frequently. Form1040x You use your apartment to conduct your personal business. Form1040x You also keep up your community contacts in Boston. Form1040x When you complete your training, you are transferred to Los Angeles. Form1040x You do not satisfy factor (1) because you did not work in Boston. Form1040x You satisfy factor (2) because you had duplicate living expenses. Form1040x You also satisfy factor (3) because you did not abandon your apartment in Boston as your main home, you kept your community contacts, and you frequently returned to live in your apartment. Form1040x Therefore, you have a tax home in Boston. Form1040x Example 2. Form1040x You are an outside salesperson with a sales territory covering several states. Form1040x Your employer's main office is in Newark, but you do not conduct any business there. Form1040x Your work assignments are temporary, and you have no way of knowing where your future assignments will be located. Form1040x You have a room in your married sister's house in Dayton. Form1040x You stay there for one or two weekends a year, but you do no work in the area. Form1040x You do not pay your sister for the use of the room. Form1040x You do not satisfy any of the three factors listed earlier. Form1040x You are an itinerant and have no tax home. Form1040x Tax Home Different From Family Home If you (and your family) do not live at your tax home (defined earlier), you cannot deduct the cost of traveling between your tax home and your family home. Form1040x You also cannot deduct the cost of meals and lodging while at your tax home. Form1040x See Example 1 , later. Form1040x If you are working temporarily in the same city where you and your family live, you may be considered as traveling away from home. Form1040x See Example 2 , later. Form1040x Example 1. Form1040x You are a truck driver and you and your family live in Tucson. Form1040x You are employed by a trucking firm that has its terminal in Phoenix. Form1040x At the end of your long runs, you return to your home terminal in Phoenix and spend one night there before returning home. Form1040x You cannot deduct any expenses you have for meals and lodging in Phoenix or the cost of traveling from Phoenix to Tucson. Form1040x This is because Phoenix is your tax home. Form1040x Example 2. Form1040x Your family home is in Pittsburgh, where you work 12 weeks a year. Form1040x The rest of the year you work for the same employer in Baltimore. Form1040x In Baltimore, you eat in restaurants and sleep in a rooming house. Form1040x Your salary is the same whether you are in Pittsburgh or Baltimore. Form1040x Because you spend most of your working time and earn most of your salary in Baltimore, that city is your tax home. Form1040x You cannot deduct any expenses you have for meals and lodging there. Form1040x However, when you return to work in Pittsburgh, you are away from your tax home even though you stay at your family home. Form1040x You can deduct the cost of your round trip between Baltimore and Pittsburgh. Form1040x You can also deduct your part of your family's living expenses for meals and lodging while you are living and working in Pittsburgh. Form1040x Temporary Assignment or Job You may regularly work at your tax home and also work at another location. Form1040x It may not be practical to return to your tax home from this other location at the end of each work day. Form1040x Temporary assignment vs. Form1040x indefinite assignment. Form1040x If your assignment or job away from your main place of work is temporary, your tax home does not change. Form1040x You are considered to be away from home for the whole period you are away from your main place of work. Form1040x You can deduct your travel expenses if they otherwise qualify for deduction. Form1040x Generally, a temporary assignment in a single location is one that is realistically expected to last (and does in fact last) for 1 year or less. Form1040x However, if your assignment or job is indefinite, the location of the assignment or job becomes your new tax home and you cannot deduct your travel expenses while there. Form1040x An assignment or job in a single location is considered indefinite if it is realistically expected to last for more than 1 year, whether or not it actually lasts for more than 1 year. Form1040x If your assignment is indefinite, you must include in your income any amounts you receive from your employer for living expenses, even if they are called travel allowances and you account to your employer for them. Form1040x You may be able to deduct the cost of relocating to your new tax home as a moving expense. Form1040x See Publication 521 for more information. Form1040x Exception for federal crime investigations or prosecutions. Form1040x If you are a federal employee participating in a federal crime investigation or prosecution, you are not subject to the 1-year rule. Form1040x This means you may be able to deduct travel expenses even if you are away from your tax home for more than 1 year provided you meet the other requirements for deductibility. Form1040x For you to qualify, the Attorney General (or his or her designee) must certify that you are traveling: For the federal government, In a temporary duty status, and To investigate, prosecute, or provide support services for the investigation or prosecution of a federal crime. Form1040x Determining temporary or indefinite. Form1040x You must determine whether your assignment is temporary or indefinite when you start work. Form1040x If you expect an assignment or job to last for 1 year or less, it is temporary unless there are facts and circumstances that indicate otherwise. Form1040x An assignment or job that is initially temporary may become indefinite due to changed circumstances. Form1040x A series of assignments to the same location, all for short periods but that together cover a long period, may be considered an indefinite assignment. Form1040x The following examples illustrate whether an assignment or job is temporary or indefinite. Form1040x Example 1. Form1040x You are a construction worker. Form1040x You live and regularly work in Los Angeles. Form1040x You are a member of a trade union in Los Angeles that helps you get work in the Los Angeles area. Form1040x Your tax home is Los Angeles. Form1040x Because of a shortage of work, you took a job on a construction project in Fresno. Form1040x Your job was scheduled to end in 8 months. Form1040x The job actually lasted 10 months. Form1040x You realistically expected the job in Fresno to last 8 months. Form1040x The job actually did last less than 1 year. Form1040x The job is temporary and your tax home is still in Los Angeles. Form1040x Example 2. Form1040x The facts are the same as in Example 1, except that you realistically expected the work in Fresno to last 18 months. Form1040x The job actually was completed in 10 months. Form1040x Your job in Fresno is indefinite because you realistically expected the work to last longer than 1 year, even though it actually lasted less than 1 year. Form1040x You cannot deduct any travel expenses you had in Fresno because Fresno became your tax home. Form1040x Example 3. Form1040x The facts are the same as in Example 1, except that you realistically expected the work in Fresno to last 9 months. Form1040x After 8 months, however, you were asked to remain for 7 more months (for a total actual stay of 15 months). Form1040x Initially, you realistically expected the job in Fresno to last for only 9 months. Form1040x However, due to changed circumstances occurring after 8 months, it was no longer realistic for you to expect that the job in Fresno would last for 1 year or less. Form1040x You can only deduct your travel expenses for the first 8 months. Form1040x You cannot deduct any travel expenses you had after that time because Fresno became your tax home when the job became indefinite. Form1040x Going home on days off. Form1040x If you go back to your tax home from a temporary assignment on your days off, you are not considered away from home while you are in your hometown. Form1040x You cannot deduct the cost of your meals and lodging there. Form1040x However, you can deduct your travel expenses, including meals and lodging, while traveling between your temporary place of work and your tax home. Form1040x You can claim these expenses up to the amount it would have cost you to stay at your temporary place of work. Form1040x If you keep your hotel room during your visit home, you can deduct the cost of your hotel room. Form1040x In addition, you can deduct your expenses of returning home up to the amount you would have spent for meals had you stayed at your temporary place of work. Form1040x Probationary work period. Form1040x If you take a job that requires you to move, with the understanding that you will keep the job if your work is satisfactory during a probationary period, the job is indefinite. Form1040x You cannot deduct any of your expenses for meals and lodging during the probationary period. Form1040x What Travel Expenses Are Deductible? Once you have determined that you are traveling away from your tax home, you can determine what travel expenses are deductible. Form1040x You can deduct ordinary and necessary expenses you have when you travel away from home on business. Form1040x The type of expense you can deduct depends on the facts and your circumstances. Form1040x Table 1-1 summarizes travel expenses you may be able to deduct. Form1040x You may have other deductible travel expenses that are not covered there, depending on the facts and your circumstances. Form1040x When you travel away from home on business, you should keep records of all the expenses you have and any advances you receive from your employer. Form1040x You can use a log, diary, notebook, or any other written record to keep track of your expenses. Form1040x The types of expenses you need to record, along with supporting documentation, are described in Table 5-1 (see chapter 5). Form1040x Separating costs. Form1040x If you have one expense that includes the costs of meals, entertainment, and other services (such as lodging or transportation), you must allocate that expense between the cost of meals and entertainment and the cost of other services. Form1040x You must have a reasonable basis for making this allocation. Form1040x For example, you must allocate your expenses if a hotel includes one or more meals in its room charge. Form1040x Travel expenses for another individual. Form1040x If a spouse, dependent, or other individual goes with you (or your employee) on a business trip or to a business convention, you generally cannot deduct his or her travel expenses. Form1040x Employee. Form1040x You can deduct the travel expenses of someone who goes with you if that person: Is your employee, Has a bona fide business purpose for the travel, and Would otherwise be allowed to deduct the travel expenses. Form1040x Business associate. Form1040x If a business associate travels with you and meets the conditions in (2) and (3), earlier, you can deduct the travel expenses you have for that person. Form1040x A business associate is someone with whom you could reasonably expect to actively conduct business. Form1040x A business associate can be a current or prospective (likely to become) customer, client, supplier, employee, agent, partner, or professional advisor. Form1040x Bona fide business purpose. Form1040x A bona fide business purpose exists if you can prove a real business purpose for the individual's presence. Form1040x Incidental services, such as typing notes or assisting in entertaining customers, are not enough to make the expenses deductible. Form1040x Table 1-1. Form1040x Travel Expenses You Can Deduct This chart summarizes expenses you can deduct when you travel away from home for business purposes. Form1040x IF you have expenses for. Form1040x . Form1040x . Form1040x THEN you can deduct the cost of. Form1040x . Form1040x . Form1040x transportation travel by airplane, train, bus, or car between your home and your business destination. Form1040x If you were provided with a free ticket or you are riding free as a result of a frequent traveler or similar program, your cost is zero. Form1040x If you travel by ship, see Luxury Water Travel and Cruise Ships (under Conventions) for additional rules and limits. Form1040x taxi, commuter bus, and airport limousine fares for these and other types of transportation that take you between: The airport or station and your hotel, and The hotel and the work location of your customers or clients, your business meeting place, or your temporary work location. Form1040x baggage and shipping sending baggage and sample or display material between your regular and temporary work locations. Form1040x car operating and maintaining your car when traveling away from home on business. Form1040x You can deduct actual expenses or the standard mileage rate, as well as business-related tolls and parking. Form1040x If you rent a car while away from home on business, you can deduct only the business-use portion of the expenses. Form1040x lodging and meals your lodging and meals if your business trip is overnight or long enough that you need to stop for sleep or rest to properly perform your duties. Form1040x Meals include amounts spent for food, beverages, taxes, and related tips. Form1040x See Meals for additional rules and limits. Form1040x cleaning dry cleaning and laundry. Form1040x telephone business calls while on your business trip. Form1040x This includes business communication by fax machine or other communication devices. Form1040x tips tips you pay for any expenses in this chart. Form1040x other other similar ordinary and necessary expenses related to your business travel. Form1040x These expenses might include transportation to or from a business meal, public stenographer's fees, computer rental fees, and operating and maintaining a house trailer. Form1040x Example. Form1040x Jerry drives to Chicago on business and takes his wife, Linda, with him. Form1040x Linda is not Jerry's employee. Form1040x Linda occasionally types notes, performs similar services, and accompanies Jerry to luncheons and dinners. Form1040x The performance of these services does not establish that her presence on the trip is necessary to the conduct of Jerry's business. Form1040x Her expenses are not deductible. Form1040x Jerry pays $199 a day for a double room. Form1040x A single room costs $149 a day. Form1040x He can deduct the total cost of driving his car to and from Chicago, but only $149 a day for his hotel room. Form1040x If he uses public transportation, he can deduct only his fare. Form1040x Meals You can deduct the cost of meals in either of the following situations. Form1040x It is necessary for you to stop for substantial sleep or rest to properly perform your duties while traveling away from home on business. Form1040x The meal is business-related entertainment. Form1040x Business-related entertainment is discussed in chapter 2 . Form1040x The following discussion deals only with meals that are not business-related entertainment. Form1040x Lavish or extravagant. Form1040x You cannot deduct expenses for meals that are lavish or extravagant. Form1040x An expense is not considered lavish or extravagant if it is reasonable based on the facts and circumstances. Form1040x Expenses will not be disallowed merely because they are more than a fixed dollar amount or take place at deluxe restaurants, hotels, nightclubs, or resorts. Form1040x 50% limit on meals. Form1040x You can figure your meals expense using either of the following methods. Form1040x Actual cost. Form1040x The standard meal allowance. Form1040x Both of these methods are explained below. Form1040x But, regardless of the method you use, you generally can deduct only 50% of the unreimbursed cost of your meals. Form1040x If you are reimbursed for the cost of your meals, how you apply the 50% limit depends on whether your employer's reimbursement plan was accountable or nonaccountable. Form1040x If you are not reimbursed, the 50% limit applies whether the unreimbursed meal expense is for business travel or business entertainment. Form1040x Chapter 2 discusses the 50% Limit in more detail, and chapter 6 discusses accountable and nonaccountable plans. Form1040x Actual Cost You can use the actual cost of your meals to figure the amount of your expense before reimbursement and application of the 50% deduction limit. Form1040x If you use this method, you must keep records of your actual cost. Form1040x Standard Meal Allowance Generally, you can use the “standard meal allowance” method as an alternative to the actual cost method. Form1040x It allows you to use a set amount for your daily meals and incidental expenses (M&IE), instead of keeping records of your actual costs. Form1040x The set amount varies depending on where and when you travel. Form1040x In this publication, “standard meal allowance” refers to the federal rate for M&IE, discussed later under Amount of standard meal allowance . Form1040x If you use the standard meal allowance, you still must keep records to prove the time, place, and business purpose of your travel. Form1040x See the recordkeeping rules for travel in chapter 5 . Form1040x Incidental expenses. Form1040x The term “incidental expenses” means fees and tips given to porters, baggage carriers, hotel staff, and staff on ships. Form1040x Incidental expenses do not include expenses for laundry, cleaning and pressing of clothing, lodging taxes, costs of telegrams or telephone calls, transportation between places of lodging or business and places where meals are taken, or the mailing cost of filing travel vouchers and paying employer-sponsored charge card billings. Form1040x Incidental-expenses-only method. Form1040x You can use an optional method (instead of actual cost) for deducting incidental expenses only. Form1040x The amount of the deduction is $5 a day. Form1040x You can use this method only if you did not pay or incur any meal expenses. Form1040x You cannot use this method on any day that you use the standard meal allowance. Form1040x This method is subject to the proration rules for partial days. Form1040x See Travel for days you depart and return , later in this chapter. Form1040x Note. Form1040x The incidental-expenses-only method is not subject to the 50% limit discussed below. Form1040x Federal employees should refer to the Federal Travel Regulations at www. Form1040x gsa. Form1040x gov. Form1040x Find the “Most Requested Links” on the upper left and click on “Regulations: FAR, FMR, FTR” for Federal Travel Regulation (FTR) for changes affecting claims for reimbursement. Form1040x 50% limit may apply. Form1040x If you use the standard meal allowance method for meal expenses and you are not reimbursed or you are reimbursed under a nonaccountable plan, you can generally deduct only 50% of the standard meal allowance. Form1040x If you are reimbursed under an accountable plan and you are deducting amounts that are more than your reimbursements, you can deduct only 50% of the excess amount. Form1040x The 50% limit is discussed in more detail in chapter 2, and accountable and nonaccountable plans are discussed in chapter 6. Form1040x There is no optional standard lodging amount similar to the standard meal allowance. Form1040x Your allowable lodging expense deduction is your actual cost. Form1040x Who can use the standard meal allowance. Form1040x You can use the standard meal allowance whether you are an employee or self-employed, and whether or not you are reimbursed for your traveling expenses. Form1040x Use of the standard meal allowance for other travel. Form1040x You can use the standard meal allowance to figure your meal expenses when you travel in connection with investment and other income-producing property. Form1040x You can also use it to figure your meal expenses when you travel for qualifying educational purposes. Form1040x You cannot use the standard meal allowance to figure the cost of your meals when you travel for medical or charitable purposes. Form1040x Amount of standard meal allowance. Form1040x The standard meal allowance is the federal M&IE rate. Form1040x For travel in 2013, the rate for most small localities in the United States is $46 a day. Form1040x Most major cities and many other localities in the United States are designated as high-cost areas, qualifying for higher standard meal allowances. Form1040x You can find this information (organized by state) on the Internet at www. Form1040x gsa. Form1040x gov/perdiem. Form1040x Enter a zip code or select a city and state for the per diem rates for the current fiscal year. Form1040x Per diem rates for prior fiscal years are available by using the drop down menu under “Search by State. Form1040x ” Per diem rates are listed by the Federal government's fiscal year which runs from October 1 to September 30. Form1040x You can choose to use the rates from the 2013 fiscal year per diem tables or the rates from the 2014 fiscal year tables, but you must consistently use the same tables for all travel you are reporting on your income tax return for the year. Form1040x If you travel to more than one location in one day, use the rate in effect for the area where you stop for sleep or rest. Form1040x If you work in the transportation industry, however, see Special rate for transportation workers , later. Form1040x Standard meal allowance for areas outside the continental United States. Form1040x The standard meal allowance rates above do not apply to travel in Alaska, Hawaii, or any other location outside the continental United States. Form1040x The Department of Defense establishes per diem rates for Alaska, Hawaii, Puerto Rico, American Samoa, Guam, Midway, the Northern Mariana Islands, the U. Form1040x S. Form1040x Virgin Islands, Wake Island, and other non-foreign areas outside the continental United States. Form1040x The Department of State establishes per diem rates for all other foreign areas. Form1040x You can access per diem rates for non-foreign areas outside the continental United States at: www. Form1040x defensetravel. Form1040x dod. Form1040x mil/site/perdiemCalc. Form1040x cfm. Form1040x You can access all other foreign per diem rates at: www. Form1040x state. Form1040x gov/travel/. Form1040x Click on “Travel Per Diem Allowances for Foreign Areas,” under “Foreign Per Diem Rates” to obtain the latest foreign per diem rates. Form1040x Special rate for transportation workers. Form1040x You can use a special standard meal allowance if you work in the transportation industry. Form1040x You are in the transportation industry if your work: Directly involves moving people or goods by airplane, barge, bus, ship, train, or truck, and Regularly requires you to travel away from home and, during any single trip, usually involves travel to areas eligible for different standard meal allowance rates. Form1040x If this applies to you, you can claim a standard meal allowance of $59 a day ($65 for travel outside the continental United States). Form1040x Using the special rate for transportation workers eliminates the need for you to determine the standard meal allowance for every area where you stop for sleep or rest. Form1040x If you choose to use the special rate for any trip, you must use the special rate (and not use the regular standard meal allowance rates) for all trips you take that year. Form1040x Travel for days you depart and return. Form1040x For both the day you depart for and the day you return from a business trip, you must prorate the standard meal allowance (figure a reduced amount for each day). Form1040x You can do so by one of two methods. Form1040x Method 1: You can claim 3/4 of the standard meal allowance. Form1040x Method 2: You can prorate using any method that you consistently apply and that is in accordance with reasonable business practice. Form1040x Example. Form1040x Jen is employed in New Orleans as a convention planner. Form1040x In March, her employer sent her on a 3-day trip to Washington, DC, to attend a planning seminar. Form1040x She left her home in New Orleans at 10 a. Form1040x m. Form1040x on Wednesday and arrived in Washington, DC, at 5:30 p. Form1040x m. Form1040x After spending two nights there, she flew back to New Orleans on Friday and arrived back home at 8:00 p. Form1040x m. Form1040x Jen's employer gave her a flat amount to cover her expenses and included it with her wages. Form1040x Under Method 1, Jen can claim 2½ days of the standard meal allowance for Washington, DC: 3/4 of the daily rate for Wednesday and Friday (the days she departed and returned), and the full daily rate for Thursday. Form1040x Under Method 2, Jen could also use any method that she applies consistently and that is in accordance with reasonable business practice. Form1040x For example, she could claim 3 days of the standard meal allowance even though a federal employee would have to use Method 1 and be limited to only 2½ days. Form1040x Travel in the United States The following discussion applies to travel in the United States. Form1040x For this purpose, the United States includes the 50 states and the District of Columbia. Form1040x The treatment of your travel expenses depends on how much of your trip was business related and on how much of your trip occurred within the United States. Form1040x See Part of Trip Outside the United States , later. Form1040x Trip Primarily for Business You can deduct all of your travel expenses if your trip was entirely business related. Form1040x 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. Form1040x These expenses include the travel costs of getting to and from your business destination and any business-related expenses at your business destination. Form1040x Example. Form1040x You work in Atlanta and take a business trip to New Orleans in May. Form1040x Your business travel totals 850 miles round trip. Form1040x On your way, you stop in Mobile to visit your parents. Form1040x You spend $2,120 for the 9 days you are away from home for travel, meals, lodging, and other travel expenses. Form1040x If you had not stopped in Mobile, you would have been gone only 6 days, and your total cost would have been $1,820. Form1040x You can deduct $1,820 for your trip, including the cost of round-trip transportation to and from New Orleans. Form1040x The deduction for your meals is subject to the 50% limit on meals mentioned earlier. Form1040x Trip Primarily for Personal Reasons If your trip was primarily for personal reasons, such as a vacation, the entire cost of the trip is a nondeductible personal expense. Form1040x However, you can deduct any expenses you have while at your destination that are directly related to your business. Form1040x A trip to a resort or on a cruise ship may be a vacation even if the promoter advertises that it is primarily for business. Form1040x The scheduling of incidental business activities during a trip, such as viewing videotapes or attending lectures dealing with general subjects, will not change what is really a vacation into a business trip. Form1040x Part of Trip Outside the United States If part of your trip is outside the United States, use the rules described later in this chapter under Travel Outside the United States for that part of the trip. Form1040x For the part of your trip that is inside the United States, use the rules for travel in the United States. Form1040x Travel outside the United States does not include travel from one point in the United States to another point in the United States. Form1040x The following discussion can help you determine whether your trip was entirely within the United States. Form1040x Public transportation. Form1040x If you travel by public transportation, any place in the United States where that vehicle makes a scheduled stop is a point in the United States. Form1040x Once the vehicle leaves the last scheduled stop in the United States on its way to a point outside the United States, you apply the rules under Travel Outside the United States . Form1040x Example. Form1040x You fly from New York to Puerto Rico with a scheduled stop in Miami. Form1040x You return to New York nonstop. Form1040x The flight from New York to Miami is in the United States, so only the flight from Miami to Puerto Rico is outside the United States. Form1040x Because there are no scheduled stops between Puerto Rico and New York, all of the return trip is outside the United States. Form1040x Private car. Form1040x Travel by private car in the United States is travel between points in the United States, even though you are on your way to a destination outside the United States. Form1040x Example. Form1040x You travel by car from Denver to Mexico City and return. Form1040x Your travel from Denver to the border and from the border back to Denver is travel in the United States, and the rules in this section apply. Form1040x The rules under Travel Outside the United States apply to your trip from the border to Mexico City and back to the border. Form1040x Travel Outside the United States If any part of your business travel is outside the United States, some of your deductions for the cost of getting to and from your destination may be limited. Form1040x For this purpose, the United States includes the 50 states and the District of Columbia. Form1040x How much of your travel expenses you can deduct depends in part upon how much of your trip outside the United States was business related. Form1040x Travel Entirely for Business or Considered Entirely for Business You can deduct all your travel expenses of getting to and from your business destination if your trip is entirely for business or considered entirely for business. Form1040x Travel entirely for business. Form1040x If you travel outside the United States and you spend the entire time on business activities, you can deduct all of your travel expenses. Form1040x Travel considered entirely for business. Form1040x Even if you did not spend your entire time on business activities, your trip is considered entirely for business if you meet at least one of the following four exceptions. Form1040x Exception 1 - No substantial control. Form1040x Your trip is considered entirely for business if you did not have substantial control over arranging the trip. Form1040x The fact that you control the timing of your trip does not, by itself, mean that you have substantial control over arranging your trip. Form1040x You do not have substantial control over your trip if you: Are an employee who was reimbursed or paid a travel expense allowance, and Are not related to your employer, or Are not a managing executive. Form1040x “Related to your employer” is defined later in chapter 6 under Per Diem and Car Allowances . Form1040x A “managing executive” is an employee who has the authority and responsibility, without being subject to the veto of another, to decide on the need for the business travel. Form1040x A self-employed person generally has substantial control over arranging business trips. Form1040x Exception 2 - Outside United States no more than a week. Form1040x Your trip is considered entirely for business if you were outside the United States for a week or less, combining business and nonbusiness activities. Form1040x One week means 7 consecutive days. Form1040x In counting the days, do not count the day you leave the United States, but do count the day you return to the United States. Form1040x Example. Form1040x You traveled to Brussels primarily for business. Form1040x You left Denver on Tuesday and flew to New York. Form1040x On Wednesday, you flew from New York to Brussels, arriving the next morning. Form1040x On Thursday and Friday, you had business discussions, and from Saturday until Tuesday, you were sightseeing. Form1040x You flew back to New York, arriving Wednesday afternoon. Form1040x On Thursday, you flew back to Denver. Form1040x Although you were away from your home in Denver for more than a week, you were not outside the United States for more than a week. Form1040x This is because the day you depart does not count as a day outside the United States. Form1040x You can deduct your cost of the round-trip flight between Denver and Brussels. Form1040x You can also deduct the cost of your stay in Brussels for Thursday and Friday while you conducted business. Form1040x However, you cannot deduct the cost of your stay in Brussels from Saturday through Tuesday because those days were spent on nonbusiness activities. Form1040x Exception 3 - Less than 25% of time on personal activities. Form1040x Your trip is considered entirely for business if: You were outside the United States for more than a week, and You spent less than 25% of the total time you were outside the United States on nonbusiness activities. Form1040x For this purpose, count both the day your trip began and the day it ended. Form1040x Example. Form1040x You flew from Seattle to Tokyo, where you spent 14 days on business and 5 days on personal matters. Form1040x You then flew back to Seattle. Form1040x You spent 1 day flying in each direction. Form1040x Because only 5/21 (less than 25%) of your total time abroad was for nonbusiness activities, you can deduct as travel expenses what it would have cost you to make the trip if you had not engaged in any nonbusiness activity. Form1040x The amount you can deduct is the cost of the round-trip plane fare and 16 days of meals (subject to the 50% limit), lodging, and other related expenses. Form1040x Exception 4 - Vacation not a major consideration. Form1040x Your trip is considered entirely for business if you can establish that a personal vacation was not a major consideration, even if you have substantial control over arranging the trip. Form1040x Travel Primarily for Business If you travel outside the United States primarily for business but spend some of your time on other activities, you generally cannot deduct all of your travel expenses. Form1040x You can only deduct the business portion of your cost of getting to and from your destination. Form1040x You must allocate the costs between your business and other activities to determine your deductible amount. Form1040x See Travel allocation rules , later. Form1040x You do not have to allocate your travel expenses if you meet one of the four exceptions listed earlier under Travel considered entirely for business . Form1040x In those cases, you can deduct the total cost of getting to and from your destination. Form1040x Travel allocation rules. Form1040x If your trip outside the United States was primarily for business, you must allocate your travel time on a day-to-day basis between business days and nonbusiness days. Form1040x The days you depart from and return to the United States are both counted as days outside the United States. Form1040x To figure the deductible amount of your round-trip travel expenses, use the following fraction. Form1040x The numerator (top number) is the total number of business days outside the United States. Form1040x The denominator (bottom number) is the total number of business and nonbusiness days of travel. Form1040x Counting business days. Form1040x Your business days include transportation days, days your presence was required, days you spent on business, and certain weekends and holidays. Form1040x Transportation day. Form1040x Count as a business day any day you spend traveling to or from a business destination. Form1040x However, if because of a nonbusiness activity you do not travel by a direct route, your business days are the days it would take you to travel a reasonably direct route to your business destination. Form1040x Extra days for side trips or nonbusiness activities cannot be counted as business days. Form1040x Presence required. Form1040x Count as a business day any day your presence is required at a particular place for a specific business purpose. Form1040x Count it as a business day even if you spend most of the day on nonbusiness activities. Form1040x Day spent on business. Form1040x If your principal activity during working hours is the pursuit of your trade or business, count the day as a business day. Form1040x Also, count as a business day any day you are prevented from working because of circumstances beyond your control. Form1040x Certain weekends and holidays. Form1040x Count weekends, holidays, and other necessary standby days as business days if they fall between business days. Form1040x But if they follow your business meetings or activity and you remain at your business destination for nonbusiness or personal reasons, do not count them as business days. Form1040x Example 1. Form1040x Your tax home is New York City. Form1040x You travel to Quebec, where you have a business appointment on Friday. Form1040x You have another appointment on the following Monday. Form1040x Because your presence was required on both Friday and Monday, they are business days. Form1040x Because the weekend is between business days, Saturday and Sunday are counted as business days. Form1040x This is true even though you use the weekend for sightseeing, visiting friends, or other nonbusiness activity. Form1040x Example 2. Form1040x If, in Example 1, you had no business in Quebec after Friday, but stayed until Monday before starting home, Saturday and Sunday would be nonbusiness days. Form1040x Nonbusiness activity on the way to or from your business destination. Form1040x If you stopped for a vacation or other nonbusiness activity either on the way from the United States to your business destination, or on the way back to the United States from your business destination, you must allocate part of your travel expenses to the nonbusiness activity. Form1040x The part you must allocate is the amount it would have cost you to travel between the point where travel outside the United States begins and your nonbusiness destination and a return to the point where travel outside the United States ends. Form1040x You determine the nonbusiness portion of that expense by multiplying it by a fraction. Form1040x The numerator (top number) of the fraction is the number of nonbusiness days during your travel outside the United States and the denominator (bottom number) is the total number of days you spend outside the United States. Form1040x Example. Form1040x You live in New York. Form1040x On May 4 you flew to Paris to attend a business conference that began on May 5. Form1040x The conference ended at noon on May 14. Form1040x That evening you flew to Dublin where you visited with friends until the afternoon of May 21, when you flew directly home to New York. Form1040x The primary purpose for the trip was to attend the conference. Form1040x If you had not stopped in Dublin, you would have arrived home the evening of May 14. Form1040x You do not meet any of the exceptions that would allow you to consider your travel entirely for business. Form1040x May 4 through May 14 (11 days) are business days and May 15 through May 21 (7 days) are nonbusiness days. Form1040x You can deduct the cost of your meals (subject to the 50% limit), lodging, and other business-related travel expenses while in Paris. Form1040x You cannot deduct your expenses while in Dublin. Form1040x You also cannot deduct 7/18 of what it would have cost you to travel round-trip between New York and Dublin. Form1040x You paid $750 to fly from New York to Paris, $400 to fly from Paris to Dublin, and $700 to fly from Dublin back to New York. Form1040x Round-trip airfare from New York to Dublin would have been $1,250. Form1040x You figure the deductible part of your air travel expenses by subtracting 7/18 of the round-trip fare and other expenses you would have had in traveling directly between New York and Dublin ($1,250 × 7/18 = $486) from your total expenses in traveling from New York to Paris to Dublin and back to New York ($750 + $400 + $700 = $1,850). Form1040x Your deductible air travel expense is $1,364 ($1,850 − $486). Form1040x Nonbusiness activity at, near, or beyond business destination. Form1040x If you had a vacation or other nonbusiness activity at, near, or beyond your business destination, you must allocate part of your travel expenses to the nonbusiness activity. Form1040x The part you must allocate is the amount it would have cost you to travel between the point where travel outside the United States begins and your business destination and a return to the point where travel outside the United States ends. Form1040x You determine the nonbusiness portion of that expense by multiplying it by a fraction. Form1040x The numerator (top number) of the fraction is the number of nonbusiness days during your travel outside the United States and the denominator (bottom number) is the total number of days you spend outside the United States. Form1040x None of your travel expenses for nonbusiness activities at, near, or beyond your business destination are deductible. Form1040x Example. Form1040x Assume that the dates are the same as in the previous example but that instead of going to Dublin for your vacation, you fly to Venice, Italy, for a vacation. Form1040x You cannot deduct any part of the cost of your trip from Paris to Venice and return to Paris. Form1040x In addition, you cannot deduct 7/18 of the airfare and other expenses from New York to Paris and back to New York. Form1040x You can deduct 11/18 of the round-trip plane fare and other travel expenses from New York to Paris, plus your meals (subject to the 50% limit), lodging, and any other business expenses you had in Paris. Form1040x (Assume these expenses total $4,939. Form1040x ) If the round-trip plane fare and other travel-related expenses (such as food during the trip) are $1,750, you can deduct travel costs of $1,069 (11/18 × $1,750), plus the full $4,939 for the expenses you had in Paris. Form1040x Other methods. Form1040x You can use another method of counting business days if you establish that it more clearly reflects the time spent on other than business activities outside the United States. Form1040x Travel Primarily for Personal Reasons If you travel outside the United States primarily for vacation or for investment purposes, the entire cost of the trip is a nondeductible personal expense. Form1040x However, if you spend some time attending brief professional seminars or a continuing education program, you can deduct your registration fees and other expenses you have that are directly related to your business. Form1040x Example. Form1040x The university from which you graduated has a continuing education program for members of its alumni association. Form1040x This program consists of trips to various foreign countries where academic exercises and conferences are set up to acquaint individuals in most occupations with selected facilities in several regions of the world. Form1040x However, none of the conferences are directed toward specific occupations or professions. Form1040x It is up to each participant to seek out specialists and organizational settings appropriate to his or her occupational interests. Form1040x Three-hour sessions are held each day over a 5-day period at each of the selected overseas facilities where participants can meet with individual practitioners. Form1040x These sessions are composed of a variety of activities including workshops, mini-lectures, role playing, skill development, and exercises. Form1040x Professional conference directors schedule and conduct the sessions. Form1040x Participants can choose those sessions they wish to attend. Form1040x You can participate in this program since you are a member of the alumni association. Form1040x You and your family take one of the trips. Form1040x You spend about 2 hours at each of the planned sessions. Form1040x The rest of the time you go touring and sightseeing with your family. Form1040x The trip lasts less than 1 week. Form1040x Your travel expenses for the trip are not deductible since the trip was primarily a vacation. Form1040x However, registration fees and any other incidental expenses you have for the five planned sessions you attended that are directly related and beneficial to your business are deductible business expenses. Form1040x These expenses should be specifically stated in your records to ensure proper allocation of your deductible business expenses. Form1040x Luxury Water Travel If you travel by ocean liner, cruise ship, or other form of luxury water transportation for business purposes, there is a daily limit on the amount you can deduct. Form1040x The limit is twice the highest federal per diem rate allowable at the time of your travel. Form1040x (Generally, the federal per diem is the amount paid to federal government employees for daily living expenses when they travel away from home, but in the United States, for business purposes. Form1040x ) Daily limit on luxury water travel. Form1040x The highest federal per diem rate allowed and the daily limit for luxury water travel in 2013 is shown in the following table. Form1040x 2013 Dates Highest Federal Per Diem Daily Limit on Luxury Water Travel Jan. Form1040x 1 – Mar. Form1040x 31 $367 $734 Apr. Form1040x 1 – June 30 312 624 July 1 – Aug. Form1040x 31 310 620 Sept. Form1040x 1 – Sept. Form1040x 30 366 732 Oct. Form1040x 1 – Dec. Form1040x 31 374 748 Example. Form1040x Caroline, a travel agent, traveled by ocean liner from New York to London, England, on business in May. Form1040x Her expense for the 6-day cruise was $5,200. Form1040x Caroline's deduction for the cruise cannot exceed $3,744 (6 days × $624 daily limit). Form1040x Meals and entertainment. Form1040x If your expenses for luxury water travel include separately stated amounts for meals or entertainment, those amounts are subject to the 50% limit on meals and entertainment before you apply the daily limit. Form1040x For a discussion of the 50% Limit , see chapter 2. Form1040x Example. Form1040x In the previous example, Caroline's luxury water travel had a total cost of $5,200. Form1040x Of that amount, $3,700 was separately stated as meals and entertainment. Form1040x Caroline, who is self-employed, is not reimbursed for any of her travel expenses. Form1040x Caroline figures her deductible travel expenses as follows. Form1040x Meals and entertainment $3,700 50% limit × . Form1040x 50 Allowable meals & entertainment $1,850 Other travel expenses + 1,800 Allowable cost before the daily limit $3,650 Daily limit for May 2013 $624 Times number of days × 6 Maximum luxury water travel deduction $3,744 Amount of allowable deduction $3,650 Caroline's deduction for her cruise is limited to $3,650, even though the limit on luxury water travel is slightly higher. Form1040x Not separately stated. Form1040x If your meal or entertainment charges are not separately stated or are not clearly identifiable, you do not have to allocate any portion of the total charge to meals or entertainment. Form1040x Exceptions The daily limit on luxury water travel (discussed earlier) does not apply to expenses you have to attend a convention, seminar, or meeting on board a cruise ship. Form1040x See Cruise Ships under Conventions. Form1040x Conventions You can deduct your travel expenses when you attend a convention if you can show that your attendance benefits your trade or business. Form1040x You cannot deduct the travel expenses for your family. Form1040x If the convention is for investment, political, social, or other purposes unrelated to your trade or business, you cannot deduct the expenses. Form1040x Your appointment or election as a delegate does not, in itself, determine whether you can deduct travel expenses. Form1040x You can deduct your travel expenses only if your attendance is connected to your own trade or business. Form1040x Convention agenda. Form1040x The convention agenda or program generally shows the purpose of the convention. Form1040x You can show your attendance at the convention benefits your trade or business by comparing the agenda with the official duties and responsibilities of your position. Form1040x The agenda does not have to deal specifically with your official duties and responsibilities; it will be enough if the agenda is so related to your position that it shows your attendance was for business purposes. Form1040x Conventions Held Outside the North American Area You cannot deduct expenses for attending a convention, seminar, or similar meeting held outside the North American area unless: The meeting is directly related to your trade or business, and It is reasonable to hold the meeting outside the North American area. Form1040x See Reasonableness test , later. Form1040x If the meeting meets these requirements, you also must satisfy the rules for deducting expenses for business trips in general, discussed earlier under Travel Outside the United States . Form1040x North American area. Form1040x The North American area includes the following locations. Form1040x American Samoa Johnston Island Antigua and Barbuda Kingman Reef Aruba Marshall Islands Bahamas Mexico Baker Island Micronesia Barbados Midway Islands Bermuda Netherlands Antilles Canada Northern Mariana Costa Rica Islands Dominica Palau Dominican Republic Palmyra Atoll Grenada Panama Guam Puerto Rico Guyana Trinidad and Tobago Honduras USA Howland Island U. Form1040x S. Form1040x Virgin Islands Jamaica Wake Island Jarvis Island The North American area also includes U. Form1040x S. Form1040x islands, cays, and reefs that are possessions of the United States and not part of the fifty states or the District of Columbia. Form1040x Reasonableness test. Form1040x The following factors are taken into account to determine if it was reasonable to hold the meeting outside the North American area. Form1040x The purpose of the meeting and the activities taking place at the meeting. Form1040x The purposes and activities of the sponsoring organizations or groups. Form1040x The homes of the active members of the sponsoring organizations and the places at which other meetings of the sponsoring organizations or groups have been or will be held. Form1040x Other relevant factors you may present. Form1040x Cruise Ships You can deduct up to $2,000 per year of your expenses of attending conventions, seminars, or similar meetings held on cruise ships. Form1040x All ships that sail are considered cruise ships. Form1040x You can deduct these expenses only if all of the following requirements are met. Form1040x The convention, seminar, or meeting is directly related to your trade or business. Form1040x The cruise ship is a vessel registered in the United States. Form1040x All of the cruise ship's ports of call are in the United States or in possessions of the United States. Form1040x You attach to your return a written statement signed by you that includes information about: The total days of the trip (not including the days of transportation to and from the cruise ship port), The number of hours each day that you devoted to scheduled business activities, and A program of the scheduled business activities of the meeting. Form1040x You attach to your return a written statement signed by an officer of the organization or group sponsoring the meeting that includes: A schedule of the business activities of each day of the meeting, and The number of hours you attended the scheduled business activities. Form1040x Prev Up Next Home More Online Publications