Does a Cruise Count as a Travel Tax Deduction?


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does a cruise count

Can your cruise ship expense count as a tax deduction? That seems like an easy question, but the IRS actually has a pretty complicated set of parameters that you need to use to determine when cruise travel is a tax write-off.

Here’s the question we received at USTaxAid:

Q: My affiliate marketing group is planning a meeting on a cruise. If people attending, took notes, discussed business, could this trip be a tax write off?

A: First of all, you need to make sure there is a business purpose. If the training is preparing you for a trade or business, it’s not deductible. If the training is helping you with your business that already exists, you pass this test.

There is also a limitation that the IRS has for luxury water travel. There is a per diem that is allowed per day. So far, the 2015 numbers have not been updated. In 2014, the daily amount was:

1/1 – 2/28           $524

3/1 – 6/30          $676

7/1 – 8/31          $670

9/1 – 12/31         $748

If the cruise is held in international waters, there is a further restriction on deductibility. You can deduct up to $2,000 per year in that case, but only if you meet the following criteria:

  1. The meeting is directly related to your trade or business,
  2. The cruise ship is registered in the US
  3. All of the ports of call are in the US
  4. You attach specific information to your tax return.

This is a more complicated answer that you probably expected to a fairly straight-forward question.
Check with your tax advisor for your own unique set of situation.

 

 

 


One Comment

  1. Tom says:

    Thx for this post Diane!

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