Attending trade shows is a great way to promote your brand, get new leads, build strong relationship with your customers and showcase your products and services. Yes, the list of benefits goes on however, did you know that there are many tax incentives that are associated with attending trade shows & expo shows? Mark E. Battersby, business and financial tax writer with Intents magazine highlights from “convention-related tax deductions to entertaining customers” in his most recent article. We have condensed these tips to keep you informed of everything that you can write off.
Keep in mind that in order for your business to benefit from tax deductions while attending an event, you need to have a business related purpose. As long as you and your staff have this business purpose, the federal tax rules allow tax deductions for all the expenses for attending events, trade shows, conventions etc.
Beware that it is only for business employees and business associates and not for friends and family without a business purpose. If your wife or family attended the show with you, her expenses are not tax eligible.
According to Battersby, all receipts for expenses of $75 or less are not required, except for lodging and travel expense for which you always should have receipts. However, at Ins’TenT, we always recommend that you keep a record of all the receipts and business expenses from the expo show. They will come in handy when it comes to proving to Uncle Sam the event’s relevance to your business.
Per Diem vs Actual Cost Deductions
Depending on the event and its location, the IRS establishes a “per diem allowance” that you can claim for your travel expenses such as meals, lodging, and other incidentals. So when it comes time to deduct your expenses, you can choose between the real cost basis or the per diem basis depending which one is more beneficial for you. For example: you can deduct in average 50% of your real meals costs or 50% of per diem allowance. In any case remember to always keep your receipts!
Working and Vacation Trip Extension
As we previously said, all your business travel expenses can be deducted. However in the case of an extended trip for vacations, after or before the event, the business related rules apply once again.
If your primary purpose of this trip was for business, you can deduct your travel expenses that are only related to the business trip. If the primary goal of your trip was to spend vacation and then to attend an event, you cannot deduct your travel expenses except for the expenses incurred while attending the show. To avoid confusions and issues we highly recommend that you avoid mixing business and personal trip. There are times when you should just enjoy your vacation and plan your business shows accordingly for another time.
What About Local Lodging Deductions?
There may be a substantial deduction amount for local lodging for business purposes. Usually those deductions can only take place if you are away from your home. But the IRS made a new proposition that would allow expo and events attendees to benefit from tax deduction for local lodging.
To conclude, stay consistent and reasonable with your all your trade show attendance expenses . Avoid paying high lodging or meal fees. Lastly, we recommend that you to stay updated on the tax incentives rules since it continuously changes over time.
For more info, read the the tax benefits for attending a trade shows