Book tax savings for weekend travel

QTA Consultants, Ltd./Renata Bliumaite

If you travel extensively on business, you probably know the drill: The airline may offer travelers a lower rate if the stay includes a Saturday night. This is nowhere near as prevalent as it was years ago, but the Saturday night rule is still around.

Strategy: Figure out the tax consequences for your situation. For instance, if you stay overnight on Saturday, this may give you a tax-saving edge. Generally, you can deduct business travel expenses if the “primary purpose” of the trip is business-related. But the number of business days versus personal days is critical. Assuming you qualify, a Saturday layover may provide extra tax savings.

Example: You’re scheduled to fly into town for business on Wednesday and leave Friday night. The round-trip airfare costs $1,200, but if you return on Sunday morning instead, it only costs $500. Say that the daily rate for the hotel is $200 a day. If you spend $100 on meals each day, the three-day business trip would cost $2,100 ($1,200 airfare + $600 lodging + $300 meals). But if you stay through Saturday, the total cost is $1,700 ($500 airfare + $800 lodging + $400 meals). So you save $400 with just a slight change in your travel plans. Plus, you get some “me” time. The IRS has previously said that a taxpayer in this situation can deduct lodging costs and 50% of the meals for all four days if they are staying longer to qualify for discounted airfare. It doesn’t matter if the extra day is spent relaxing. Tip: Lodging costs may increase for a Saturday night stay, so this could factor into your decision.