Cruisers Forum
 


Join CruisersForum Today

Reply
 
Thread Tools Rate Thread Display Modes
Old 30-11-2015, 13:49   #1
Registered User

Join Date: May 2015
Posts: 30
Deductibility of Travel Expenses

Hi guys-

Does anyone have any experience with the deductibility of travel expenses for a cruiser who is far from home and who flys home to work? A reference to the tax code would also be useful.

Thank you.
__________________

__________________
Sevi is offline   Reply With Quote
Old 30-11-2015, 14:06   #2
Registered User
 
Mark Stillwell's Avatar

Join Date: Jul 2013
Location: Missouri
Boat: Beneteau 393
Posts: 101
Re: Deductibility of Travel Expenses

I suspect it is not deductible as you phrased it....fly home to work...as it is not a business expense.

If you are a self employed live-aboard and travel from our home office on the boat to a job at some other location, it would be a business expense just as traveling from a land based location to another location would be a business expense.

I'm not a tax accountant, just my thoughts.
__________________

__________________
Mark Stillwell is offline   Reply With Quote
Old 30-11-2015, 14:11   #3
Registered User

Join Date: Feb 2014
Location: St Augustine, FL
Boat: 1995 Privilege 51
Posts: 285
Images: 3
Re: Deductibility of Travel Expenses

Assuming we are talking US tax code here... As a W2 employee, very little is tax exempt/deductible anymore, and even then you have to have enough to make it worth itemizing.

If you had a business, there is an entire slew of rules that come in to play. I used to look for apartment buildings to buy when traveling for my daughters basketball tournaments. I 'wrote off' mileage for towns that I was truly interested in. But an audit is an entirely different matter. First off, I had broker contracts in these cities even if I didn't meet with them. Second, I didn't deduct EVERY trip, as we sometimes traveled to the east coast where I was not interested in buying, etc. etc. etc. It gets very gray very fast.

~ Following Cs ~
__________________
FollowingCs is offline   Reply With Quote
Old 30-11-2015, 14:18   #4
Registered User
 
denverd0n's Avatar

Join Date: Jun 2008
Location: Tampa, FL
Posts: 3,949
Images: 6
Re: Deductibility of Travel Expenses

Yeah, it depends on the specific circumstances. Basic, normal employee who took off somewhere and now has to fly "home," though, no, it's not going to be deductible.
__________________
denverd0n is offline   Reply With Quote
Old 30-11-2015, 17:03   #5
Senior Cruiser
 
FSMike's Avatar

Cruisers Forum Supporter

Join Date: Aug 2009
Location: Bahamas/Florida
Boat: Solaris Sunstar 36' catamaran
Posts: 2,654
Images: 5
Re: Deductibility of Travel Expenses

Interesting.

Something I've never thought of -

Long long ago in a galaxy far, far away -

When I used to do a lot of income tax, there was a provision in the IRC that was primarily used by construction workers.

Simply put, if you worked at more than one location away from your home in the same tax year, you got to write off your living expenses at the job location(s) as an employee business expense. This does not include moving your home, only working at different temporary locations.

For example, I had clients who towed small trailers to their next job location, put it in a trailer park, and drove their truck to work. They could write off the cost of the trailer park, utilities, costs of moving their trailer from one job to the next, etc. Hell, if I remember rightly they wrote off laundry, food, etc. as long as they were away from home.

Now, the question is : Could you do that if you moved your boat to different marinas/anchorages etc. for different jobs during the year?
I think you could, if you could show that your permanent home was elsewhere. I doubt that a mail forwarding service would work for this, you would need a home somewhere. Maybe you own a mansion, maybe you share an apartment with a friend, or whatever.

If you could get in step with the legalities, it would be fun to write off your sailing, uh, I mean business expenses.

As I said, this conjecture is based on little bits of antique tax law lodged in my brain. I most assuredly do NOT say this is legal or practical. But wouldn't it be fun?
__________________
Sail Fast Live Slow
FSMike is offline   Reply With Quote
Old 30-11-2015, 19:03   #6
Registered User

Join Date: Dec 2010
Location: W Carib
Boat: Wildcat 35, Hobie 33
Posts: 7,923
Re: Deductibility of Travel Expenses

Quote:
Originally Posted by FSMike View Post
...
For example, I had clients who towed small trailers to their next job location, put it in a trailer park, and drove their truck to work. They could write off the cost of the trailer park, utilities, costs of moving their trailer from one job to the next, etc. Hell, if I remember rightly they wrote off laundry, food, etc. as long as they were away from home.

...
Better yet, bill it all to the client (if not a W2 employee). This way its covered 100% rather than just reducing your taxable income (if deducting, effectively you only save a % of these expenses equal to your effective tax rate...there is no such thing as a "write off" ).

I haven't really worked since leaving to go cruising, but I have been coaxed into doing a few short gigs...all travel expenses round trip from my cruising location, and living expenses on site, billed to client 100%.
__________________
belizesailor is offline   Reply With Quote
Old 30-11-2015, 21:32   #7
Registered User

Join Date: Apr 2013
Posts: 4,877
Re: Deductibility of Travel Expenses

If you own the buisness, you can claim lots of things and might even get away with it. You just need to answer the questions correctly. (ie: if you live on your boat, it could be a buisness expense to travel to a client meeting...that happens to be in the same city as your headquarters...but your official home is where the boat is...still could get messy constantly updating where your home is.

As an hourly/salery employee...unless you can get your boss to pay for it...you are pretty much out of luck.
__________________
valhalla360 is offline   Reply With Quote
Old 30-11-2015, 22:04   #8
Senior Cruiser
 
FSMike's Avatar

Cruisers Forum Supporter

Join Date: Aug 2009
Location: Bahamas/Florida
Boat: Solaris Sunstar 36' catamaran
Posts: 2,654
Images: 5
Re: Deductibility of Travel Expenses

Quote:
Originally Posted by valhalla360 View Post
----
As an hourly/salery employee...unless you can get your boss to pay for it...you are pretty much out of luck.
Unless you meet the conditions I posted about, where you can deduct the items as an employee business expense.
Assuming the same law still exists.
__________________
Sail Fast Live Slow
FSMike is offline   Reply With Quote
Old 01-12-2015, 04:03   #9
Registered User

Join Date: Apr 2013
Posts: 4,877
Re: Deductibility of Travel Expenses

Quote:
Originally Posted by FSMike View Post
Unless you meet the conditions I posted about, where you can deduct the items as an employee business expense.
Assuming the same law still exists.
I think the problem is you have it reversed. With the trailer, you are traveling specifically for work and maintaining a stationary home. In the scenario as originally posted, you are traveling for personal benefit and returning to a stationary office.

I think you would have a tough time selling that one if you got audited.

Now if you own a buisness, you have a lot more flexibility to claim a reason for the travel.
__________________
valhalla360 is offline   Reply With Quote
Old 01-12-2015, 06:09   #10
Registered User
 
denverd0n's Avatar

Join Date: Jun 2008
Location: Tampa, FL
Posts: 3,949
Images: 6
Re: Deductibility of Travel Expenses

Quote:
Originally Posted by FSMike View Post
Could you do that if you moved your boat to different marinas/anchorages etc. for different jobs during the year?
The key point is that it has to be a business requirement that you move to that location. You must be moving FOR the job, not just because you want to travel around.

I suspect that the OPs situation does not meet the requirements for this.
__________________
denverd0n is offline   Reply With Quote
Old 01-12-2015, 09:55   #11
Registered User

Join Date: Feb 2011
Posts: 2,105
Re: Deductibility of Travel Expenses

Short answer is NO. Can only deduct travel from work site to another work site, not the travel to work itself. However, if you travel to search for work, then the travel expenses can be deducted.
__________________
reed1v is offline   Reply With Quote
Old 01-12-2015, 10:00   #12
Registered User

Join Date: Mar 2011
Location: fl- various marinas
Boat: morgan O/I 33' sloop
Posts: 1,096
Re: Deductibility of Travel Expenses

Travel to a temporary job location as well as local living expenses (rent not food) is deductible and well worth taking if you qualify. The keys are that the work must be temporary (not open ended duration) and you must be maintaining a permanent residence. If the income earned is not a lot more then the travel and temporary living expenses you had better have excellent documentation.
__________________
Dave22q is offline   Reply With Quote
Old 01-12-2015, 10:07   #13
Registered User

Join Date: Jul 2004
Posts: 134
Re: Deductibility of Travel Expenses

Yes, you probably can if you are self employed and do not work at the location you are traveling to exclusively.

I went through an audit where this was questioned, and a tax attorney proved me right.

Keep documentation longer than you think you need to though.
__________________
svJasmine is offline   Reply With Quote
Old 01-12-2015, 10:33   #14
Registered User

Join Date: May 2013
Posts: 447
Re: Deductibility of Travel Expenses

Quote:
Originally Posted by FSMike View Post
Interesting.

Something I've never thought of -

Long long ago in a galaxy far, far away -

When I used to do a lot of income tax, there was a provision in the IRC that was primarily used by construction workers.

Simply put, if you worked at more than one location away from your home in the same tax year, you got to write off your living expenses at the job location(s) as an employee business expense. This does not include moving your home, only working at different temporary locations.

For example, I had clients who towed small trailers to their next job location, put it in a trailer park, and drove their truck to work. They could write off the cost of the trailer park, utilities, costs of moving their trailer from one job to the next, etc. Hell, if I remember rightly they wrote off laundry, food, etc. as long as they were away from home.

Now, the question is : Could you do that if you moved your boat to different marinas/anchorages etc. for different jobs during the year?
I think you could, if you could show that your permanent home was elsewhere. I doubt that a mail forwarding service would work for this, you would need a home somewhere. Maybe you own a mansion, maybe you share an apartment with a friend, or whatever.

If you could get in step with the legalities, it would be fun to write off your sailing, uh, I mean business expenses.

As I said, this conjecture is based on little bits of antique tax law lodged in my brain. I most assuredly do NOT say this is legal or practical. But wouldn't it be fun?
As others have explained, this does not apply to a normal W2 job. The company itself can deduct the travel expenses if you are a standard employee and they are paying to get you from location to location. Example of this is an offshore oil worker. Out of the country, you work 28 days on and 28 days off. The expenses to send you to the rig and home every 28 days are deductible by the company, not by you.

Unless you are an independent contractor, it would be a business expense for yourself, which could be deducted in your schedule C travel. It really does not matter where you are travelling to/from, as long as it directly pertains to the work performed and compensation for that work. Boats are recognized by the IRS as residences and even businesses, so maintaining a single address is not important. Just be careful if you are deducting you boat as a business expense part of the business, not a residence.

If the company wants you bad enough, they will fly you in and out and deduct it themselves if you are still a W2 employee. You can show that you work at home (on the boat) and must go back a few times a year for meetings, etc.

Have had a lot of these discussions around limited retirement and ability to maintain benefits versus contracting for the company, and there are a number of pitfalls either way.
__________________
tdoster is offline   Reply With Quote
Old 01-12-2015, 11:05   #15
Registered User
 
denverd0n's Avatar

Join Date: Jun 2008
Location: Tampa, FL
Posts: 3,949
Images: 6
Re: Deductibility of Travel Expenses

Quote:
Originally Posted by tdoster View Post
The expenses to send you to the rig and home every 28 days are deductible by the company, not by you.
Of course, if you were required to provide your own transportation to and from the rig, and pay for it yourself, then those expenses would, in fact, be deductible by the worker. But that's not how it is done in the oil industry. There are other industries, though, where workers are expected to get themselves to the work location, at their own expense. For them, those travel expenses would be deductible.

In any case, while all of the discussion around self-employment situations, and temporary travel to a work location, is interesting and probably useful for some of the lurkers here, based on the OP's original question, and the way he described the situation, it is pretty clear that the correct answer for him is definitely "no."
__________________

__________________
denverd0n is offline   Reply With Quote
Reply

Thread Tools
Display Modes Rate This Thread
Rate This Thread:

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
Travel journal, travel log, logbook app! Tobi_R Fishing, Recreation & Fun 2 27-09-2014 07:02
Minimize Travel Expenses when Buying a Used Boat - Usagi Our Community 40 17-03-2013 17:27
Will Share Expenses with Cruisers - Caribbean - June cbcat Crew Archives 2 06-06-2009 05:39
How much for shared expenses - Poll seagypsywoman Crew Archives 6 02-12-2008 16:35
Monthly Sailing Expenses? (Estimates or Guides) vveerrgg Multihull Sailboats 5 21-08-2008 14:58



Copyright 2002- Social Knowledge, LLC All Rights Reserved.

All times are GMT -7. The time now is 09:53.


Google+
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.
Social Knowledge Networks
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.

ShowCase vBulletin Plugins by Drive Thru Online, Inc.