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I'm a part-time software engineer, and I want to go to the Bay Area to meet people I've only met online, do networking, meet my employer and former employer in-person, etc. However, it's a trip I'm paying for myself and I will do stuff that's fun and maybe meet family members or something as well. I also received a personal development grant (from a program, not an employer) and will use part of it to pay for the trip.

Could I deduct some of the trip costs as self-employment deductibles?

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  • you mention 1099 but then use the words "meet my employer and former employer" are they customers or employers? May 4, 2023 at 16:25
  • I'm tagging as US since you mentioned 1099 and the Bay Area.
    – littleadv
    May 4, 2023 at 16:27
  • Please clarify your specific problem or provide additional details to highlight exactly what you need. As it's currently written, it's hard to tell exactly what you're asking.
    – Community Bot
    May 4, 2023 at 20:00
  • @mhoran_psprep I guess both? I was categorized as a nonemployee
    – ian101
    May 4, 2023 at 23:42

2 Answers 2

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Business allowable deductions have to be "ordinary and necessary" (26 USC 162). If you're mixing a business trip with a vacation you'll need to determine what is the primary reason, is it a business trip that you spend some time to relax on a side of, or is it a vacation that you're mixing with some occasional business meetings? You can go through the IRS Publication 463 for more guidance on making that determination.

In the end, in audit, it will all come to your specific facts and circumstances and how you can justify and defend your position. One might argue that meeting the current employer is both ordinary and may be even necessary. But can the same be said about meeting past employers? Networking? Meeting online friends in person? I doubt it.

"Personal development" is not a deductible expense. Paying for trainings is, going to relevant trade conference maybe is, but you'll need to show receipts for specific things that you paid for that qualify as development.

Also, you cannot deduct an expense if someone else paid for it. So if you're paying for the trip from the money you got in a grant - it cannot be deductible unless that grant is included in your taxable income.

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  • Thanks! I'll also cover the trip with 1099 income, so maybe I'll use the grant for some parts that wouldn't make sense as deductibles. It's also possible that the clients/employers I'd meet there will be W2 and not 1099 income. I think going to the Bay Area would be pretty ordinary for a developer, not necessarily necessary (but a training isn't necessary either). Networking could be "ordinary and necessary" because it's a form of marketing when you're self-employed.
    – ian101
    May 4, 2023 at 23:41
  • Say I have a number of things that I do on this trip that are "ordinary and necessary" for my self-employment, and some things that are more for fun (they may also be helpful for my career and thus my self-employed work in indirect ways, but I wouldn't deduct them). Should I then deduct the entire cost of the flight and hotel, or should I calculate a percentage?
    – ian101
    May 4, 2023 at 23:59
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    You should read the IRS publication I linked to. You should also read the IRS Publication 535. If you're a W2 employee, then it is not your decision what is ordinary and necessary, but your employer's. No, going to the Bay Area is not "ordinary" for a developer. There are millions of developers who never go to the Bay Area. There's nothing in particular required for your job in that specific geographic location. "networking" is not an expense. Meeting people not related to any specific business transaction is not an expense.
    – littleadv
    May 5, 2023 at 0:24
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    As a general rule, Revenue Agents have seen it all and heard it all, you're not the first one trying to pass a personal trip as a business expense.
    – littleadv
    May 5, 2023 at 0:27
  • Thanks, I'll look into it more. Since there's a good deduction for W2 and not 1099, I thought this work-related trip might count, but I see how it's not exactly necessary for my work and the IRS wants to get their money.
    – ian101
    May 6, 2023 at 2:31
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If you are a W-2 employee. The decision to pay for the trip, and how it impacts their expenses and taxes is a decision for your employer. If your employer wants to pay for you to visit one of their offices, or to participate in an event or meet their customers, then that would seem to be a reasonable expense for them.

If you are a person with 1099 income. Then some of your expenses might be considered a business expense. Meeting customers is normal. Meeting potential clients is normal.

There are some complications:

However, it's a trip I'm paying for myself and I will do stuff that's fun and maybe meet family members or something as well.

If you do work things during the day, but visit fiends and family at night that is fine. Once the friends and family start to be the focus the IRS considers it a vacation with very little work done.

I also received a personal development grant (from a program, not an employer) and will use part of it to pay for the trip.

Now this makes it complex. If you have to send them receipts for specific items (airfare, hotel, ticket to the networking event) then those expenses are not deductible because they are covered directly by the grant.

If they give you $x and you can use it for anything then that $x is income. If you are allowed to count this trip as a business expense then those expenses will reduce the tax impact of the grant.

Talk to your tax advisor regarding these issues and the impact of your plan.

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  • Yeah, I don't have to send them receipts, just an update after a year about what I generally used the money before (not a legal/tax document). But yeah, some or all of the trip is probably not tax-deductible.
    – ian101
    May 6, 2023 at 2:29

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