Tax Deduct a Cruise!

Has your wife been harping on you lately about all work and no play? Is she an employee or a partner of your business (or, more likely, are you the employee)? Why not consider a business cruise, allowing you to write off travel expenses as business tax deductions?

Because of extensive abuses involving tax deductions of conventions or seminars on cruise ships, the regulations allowing their deduction as business travel expenses were tightened and limited a number of years ago. Presently you can only deduct up to $2,000 per year for each person attending conventions and seminars on cruise ships, and only if the cruise trip meets all of the following requirements:

1. The convention, seminar, or meeting offered on the cruise ship must be directly related to your trade or business.
2. The cruise ship must be a vessel registered in the United States.
3. All of the cruise ship's ports of call are in the United States or in possessions of the United States.
4. You must attach to your tax return a written statement signed by you that includes information about:
   1. The total days of the trip (not including the days of transportation to and from the cruise ship port),
   2. The number of hours each day that you devoted to scheduled business activities, and
   3. A program of the scheduled business activities of the meeting.
5. You attach to your return a written statement signed by an officer of the organization or group sponsoring the meeting that includes:
   1. A schedule of the business activities of each day of the meeting, and
   2. The number of hours you attended the scheduled business activities.

Accordingly, conventions and seminars offered on Caribbean cruises are not tax deductible since their ports of call fall outside the United States.

Cruising for Tax Deductions

Post Updated May 2, 2015