Write Off Your Vacation

It's time for another family vacation, and to blow a few thousand after-tax dollars to hit the beach for a week.

Just as you ponder this big-ticket expense, your next door neighbor, fresh from finishing her taxes, arrives to brag about how she wrote off part of her Mexico vacation.

How did she do it? Was it legal? It sure would be nice to get at least some financial help with your upcoming trip. But how?

Turns out there are several ways to mix business with pleasure to make at least part of your trip deductible in the IRS' eyes.

Suffice to say, you probably won't get a 14-day Caribbean cruise or a week on Hawaii's Kohala Coast covered. You might have to scale back your ambitions to a few days in New York or New Orleans.

And don't expect to write off the whole thing. But even a partial deduction, if only just for you as family head, can help.

Now, it takes smart planning. Congress has no desire to publicly subsidize your private vacation. But they do recognize where legitimate business, charity or even medical ends are being accomplished. Follow the rules, and you can mix legitimate business with your legitimate vacation to make it work.

As fair warning, the rules can be daunting, and your deductions will vary according to your individual tax situation.

Your trip must have substantial business purpose -- it's advisable that the majority of time be spent on that purpose. For family trips, you can't write off your kids' airfare. But common expenses, like mileage, hotel rooms and rental cars apply.

Click here for the video version of this story from Jennifer Openshaw.