Long-term financial security is a topic that is extremely important to many families today, especially those that are of the baby boomer generation who may be looking to retire in the next several years. The money you have saved throughout the years is something that you plan to live on, and in order to make smart investments, it takes some research and planning.
Sometimes saving money means restricting your spending and doing less, including taking fewer vacations. But, what if we told you that you don’t have to give up your vacations completely? Cruises can be a great way to travel and can also offer you tax deductions.
Tax Deductible Cruise Basics
You can deduct travel by ship if you plan to hold a convention or other business event or business meeting that is completed on the ship, or if you use the ship as a way of transportation to get to your business destination.
If you go on a cruise and want to deduct the money you spend, the biggest restriction is that it must be on a U.S.-registered ship that stops only in the United States or other United States-owned territories such as the U.S. Virgin Islands or Puerto Rico. When it comes time to filing your tax return, be sure that there is a signed note from the on-ship meeting or seminar sponsor that lists the business meetings that were scheduled daily. It must be certified and show how many hours you spent attending the business meetings/conference/seminar, which you can get from the meeting sponsor. You are limited to a $2,000 deduction every year for these meetings. If you spent separate amounts of money on meals and entertainment on the ship, you can deduct 50% of these expenses.
In addition, you can earn tax deductions if you use a cruise ship or other water transportation as a means of getting to your business destination. In this situation, you can deduct your travel day, but it’s limited to an amount equal to twice the highest amount federal workers are paid each day (per diem rate) for their living expenses while traveling through the United States on business related to the government. If you’re not sure what this rate is, you can find it via the IRS under Per Diem Rates.
So, if you’re thinking about retiring and tightening up your spending, remember that with a little research and creativity, you can still plan a fun trip that is educational and tied into your career and business meetings. If you own a company, or are closely involved in the leadership of a company, consider how your next seminar or conference could be considered a smart investment through tax write offs.
Looking for more budget-savvy trip cruise ideas? Contact our resourceful agents, today!
** Please note: Our agents here at USA River Cruises are not tax experts, so please check with your own tax preparers about any state or federal laws that may apply to you.