Foreign Travel

Simply stated, if you travel outside the U.S. purely for business purposes, all your travel expenses of getting to and from your business destination are deductible. However, if you spend part of your time in a foreign country engaging in personal activities, you may have to allocate your travel expenses in proportion to the number of days you spent on nonbusiness activities during your trip, unless you meet one of the following conditions:

• You were outside the U.S. for a week or less, combining business and personal activities (a week is seven consecutive days — not counting the day you leave the U.S., but counting the day you return to the U.S.).
• You were outside the U.S. for more than a week, but you spent less than 25 percent of the total time you were in a foreign country on personal activities (counting both the day your trip began and the day it ended).
• You can establish that a personal vacation was not a major consideration.

If you meet one or more of these conditions, you're in luck! Your trip is considered entirely conducted for business and you can deduct all of your business-related travel expenses. If you don't meet at least one of these conditions and you spent 25 percent or more of your time on personal activities, you'll have to allocate your travel expenses of getting to and from your destination between your business and personal activities to determine your deductible amount. You must allocate your expenses for foreign travel even if your trip was primarily for business reasons.

Remember, if your trip was primarily for vacation purposes, the entire cost of the trip is a nondeductible personal expense. You would be able to deduct only the expenses that you incurred on the trip that were directly related to your business (if any).

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