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?
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.
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.
