Travelling for Work (Tax Claim Question)

• 

  Baysew on 05/02/2018 - 17:12

  +7

  Has your accountant outsourced to OzBargain?

• 

  theHMASfriendship on 05/02/2018 - 17:20

  -1

  Claim all, if disputed show evidence you were working from over there. Two return flights is more to claim anyway than what you are doing.

  I am not an accountant, merely a seeker of bargains.

• 

  djkelly69 on 05/02/2018 - 17:31

  I am also not an accountant, but would think the reason for the trip is business, so the costs of the trip which relate to the business can be claimed by the business (eg. flights, most if not all of the accommodation, etc).

• 

  MITM on 05/02/2018 - 17:43

  Reason for travel = business = 100% deductible.
  Weekends are non working, the other 5 days of the week you'll check in on your work emails no doubt (even if poolside).

• 

  [Deactivated] on 05/02/2018 - 18:02

  ask your work HR

  • 

    brazen00 on 05/02/2018 - 18:04

    +5

    as a sole trader

    I'm sure OP has already spoken to themselves about this.

    • 

      theHMASfriendship on 05/02/2018 - 18:47

      +7

      Well if they've signed off it should all be good.

• 

  juventino on 05/02/2018 - 18:07

  +1

  it's all about perception and being reasonable when claiming for tax deduction.

  claim all the expenses for flights since you can easily convince the taxman you will need those flights regardless of your duration of stay.

  claim partial expenses for accommodation for work related expenses. No one is going to believe that you will be working each and every day for those 20 days. so spare like 5 days for personal activities then claim 75% of accommodation expenses.

  • 

    GnarlyKnuckles on 07/02/2018 - 02:49

    'claim all the expenses for flights since you can easily convince the taxman you will need those flights regardless of your duration of stay.'

    I totally agree with this, and the rationale is completely logical. It even happens to be true, in your case! LOL

    You would only ever have a problem with claiming on these types of flights with the ATO if you did it more than once every year or two. Even then, as long as you conformed with their guidelines, there would never be any problem. Claim 100%.

    Happy trail$$$

• 

  chumlee on 05/02/2018 - 21:13

  Is an auditor from the ATO coming with you?

  If no, claim the whole trip. You really think they have the resources to check every deduction in Australia?

  They have systems that compare your deductions and revenue with similar industry deductions/revenue.

  You reckon Turbull became a multimillionaire by being honest with his tax affairs?

  • 

    GnarlyKnuckles on 07/02/2018 - 03:04

    I think the sole killjoy/grinch who 'negged' chumlee (good to see that you moved on from working at that pawn shop btw, chumlee) perhaps misunderstood his post. I believe that what the honourable Mr chumlee was saying was:

    'Claiming 100% of the airfares is entirely reasonable because as a sole-trader you need to pay for them out of your own pocket regardless of how much time you decide to spend in the US… and also, make sure you also claim a fair whack of the accommodation costs associated with the trip.'

    I'd be inclined to leave what ultimately constitutes a 'fair whack' in this context up to your new, and more creative accountant.

• 

  Stoozer on 05/02/2018 - 22:55

  For such a long flight it would be reasonable to claim a full deduction for first class travel or do they only allow this for politicians? just be sure to declare your Qantas double status credits in your tax return.

• 

  CheapskateQueen on 05/02/2018 - 23:09

  -4

  Hhmm interesting one. You miiiiigght be able to get away with claiming the full airfare especially if the NY conference is legit for work (and not some loosely related fun day disguised as a conference. In an audit they'll ask for evidence you attended the conference) because that'll explain the long delay in between. But that IS a long delay in which you'll be holidaying.

  It's usually a main purpose test and normally a 2 week holiday after a conference would make the entire airfare non deductible. But the NY conference spices the issue up. I'd claim 50% of the airfares. Even if you got audited and they disallowed the airfare deduction, in your case i don't think a penalty would be applied if you claimed 50%.

  Only claim accommodation costs for the nights of your conferences + 1 travel night. Eg 22 to 26 April and 10-11 May. You're not entitled to the other accommodation.

  • 

    GnarlyKnuckles on 06/02/2018 - 02:06

    'It's usually a main purpose test and normally a 2 week holiday after a conference would make the entire airfare non deductible.'

    I believe this advice is completely erroneous/incorrect, and that you should ignore it. Why on earth would (frugally) incorporating a 2-week holiday at any destination after a work-trip/engagement '… make the entire airfare non deductible.' ?!? That makes absolutely no sense whatsoever. In my humble opinion that is complete BS, and you can claim the entire airfare.

    Check all this with your accountant, and post what they tell you here for our future reference.

    • 

      CheapskateQueen on 06/02/2018 - 07:59

      Lol ok mate.

• 

  GnarlyKnuckles on 06/02/2018 - 01:52

  -4

  In my humble (non-accountant) opinion, as a sole trader (as opposed to someone employed by/being paid a salary by an Australian company) not only can you claim the entire air-fare as a tax deduction (as someone noted above, the primary/instigating purpose of the trip is work; the fact that you have decided to insert some extra days/other things into the trip is irrelevant re tax deduction), but re this:

  'I can just work from over there.' …

  … you should also seriously look into whether you are actually required to pay any 'Australian tax' at all on any of the work you do OUTSIDE AUSTRALIA during this trip. I reckon maybe you are not required to pay tax on the income you earn outside of Australia to the ATO, as a sole trader, in this context. Ask your accountant about THAT, hombre.

  • 

    CheapskateQueen on 06/02/2018 - 08:03

    +2

    Wow. Now you're really off the mark.

    As an Australian resident for tax purposes you must declare income you earn from all Australian and worldwide sources.

    That being said just because he's overseas for a few weeks doesn't mean his income has an international source.

    I will not reply to any additional posts in relation to this because you are simply wrong. I was offering help to OP but i won't spend any more time.

    • 

      GnarlyKnuckles on 06/02/2018 - 23:10

      -2

      'I will not reply to any additional posts in relation to this because you are simply wrong….'

      Okay, so you're taking your bat and ball and going home/having a 'teeny-tax-tantrum'. ;-P

      Do note though, that I said he may not be required to pay tax on it to the ATO. You twisted this/my words, and incorrectly made out as though I had said he should not declare it. I did not say that, and I trust that you understand the difference between declaring something, and actually paying tax on it? The fact is that many thousands of Australian citizens earn income while off-shore that they are not required to pay tax to the ATO on. They may be required to pay some tax on it in the country they earn it in, but that is entirely another matter. Most countries in the world have substantially lower income tax than Australia, and if you have the capacity to do some work off-shore it can be a real 'boon' come tax-time. In fact, I do it myself semi-regularly so I do have some idea what I'm on about in this regard.

      So C-sk8-Q, in failing to understand the difference between declaring something and actually paying tax on it (not to mention essentially misquoting me/totally misrepresenting what I said/advised the OP to look into via his accountant), it is you that is 'simply wrong'. Please try not to misrepresent other people's comments in future, it only reflects badly on you in the long run.

      Cheers

      • 

        CheapskateQueen on 07/02/2018 - 00:42

        To anyone reading this guys comments, do not listen to him. He is simply wrong.

        The end.

      • 

        GnarlyKnuckles on 07/02/2018 - 02:11

        -2

        @CheapskateQueen:

        'He is simply wrong.'

        Not so once again Queeny. I can only assume that you are unaware of the following facts, which I have cut/pasted directly from the ATO's official website:

        'As your foreign income may also be taxed in the source country, it is potentially subject to double taxation. To overcome this, Australia has a system of credits and exemptions and has signed tax treaties with more than 40 countries, including all our major trade and investment partners.'

        Unsurprisingly, this list of '… all our major trade and investment partners' includes the US, which is the country the OP is specifically asking about.

        (see https://www.ato.gov.au/Individuals/Income-and-deductions/Inc…)

        By the way, I thought you promised to stop inserting misinformation into this thread?!? ;-P

  • 

    Krankite on 06/02/2018 - 09:08

    You always get taxed by someone, I'd rather the ATO that the IRS.

    (unless of course you got one of those double dutch sandwiches on hand?)

• 

  vandite on 06/02/2018 - 12:44

  +1

  Thanks for advice everyone. Both are legitimate conferences for work purposes but my job also offers me the flexibility to work from anywhere. I won't be earning any foreign income unless I happen to gain work from the conferences (which is part of the reason I'm going).

  I had to book the flight regardless but the accountant told me this morning that most likely I can only really claim partial:
  "Have a look at the days activities from 27th April to the 10th May because if this is private then when looking at the whole trip’s substance, there is a quite a mix of private and work. A conservative approach then would apportion the flight on this basis."

  Granted that I have worked out that he is extremely conservative, I'll probably seek to claim the whole thing, provide the itinerary and then I guess it's at the ATO's discretion about whether it's fair or not.

  • 

    GnarlyKnuckles on 06/02/2018 - 23:17

    +1

    'I have worked out that he is extremely conservative …'

    Given that you are a sole trader, I strongly suggest getting a much less conservative (and perhaps, slightly more creative) accountant. Depending on your situation, it could save you many thousands of dollars per year (think 'home office', 'car expenses' etc.).

• 

  Smulder on 06/02/2018 - 21:57

  +3

  Since you have booked the trip already, The ATO will expect you to keep a travel diary / logbook while you are away. This is an ATO requirement (see here about half way down) and they do not consider it optional.

  Make a note each day of whether your activities related to work (ie attending the conference, or doing other work), or whether they were personal activities (ie Grand Canyon day tour).

  You then claim the work related percentage of the entire cost of the trip. This is how the ATO would expect you to calculate your deduction. They would likely be skeptical that you went to the USA for 20 days for 5 days of conferences and had no private portion.

  Any other method of calculating your deduction is against the ATO's specific guidelines and runs the risk of being denied on audit. Plenty of people take the risk however.

  Hope this helps a bit :)

  • 

    GnarlyKnuckles on 07/02/2018 - 02:38

    'They would likely be skeptical that you went to the USA for 20 days for 5 days of conferences and had no private portion.'

    I agree with this entirely, but I don't think there would be any problem with claiming 100% of a return airfare from Australia; because that would need to be paid (as a 'work expense') regardless of how many days there are in between the conferences. Even if there was just ONE conference, and you chose to 'stay on' for a month after it, I reckon you could STILL legitimately claim the entire return airfare. Why not? If, as a sole trader, you decide that you will take a few weeks off work while you happen to be in the US, who is the ATO to decide that this (entirely reasonable decision/choice) should incur a 'tax-related penalty' of hundreds of dollars? The short answer is that they will not decide that. People do what you are suggesting all the time. Claim 100% of the airfare (and get a more 'forward-thinking' accountant too!). Also, the fact that you are attending two conferences simply bolsters your position (tax-wise). I do however, advise against claiming accommodation costs incurred in the interim between the two conferences. That would likely be viewed as a 'bridge too far' … ;-P

    One other thing that has just occurred to me OP is that if you plan to actually do a substantial amount of paid work (even potentially) while you are in the US, make sure you look into your VISA restrictions in that regard/how much you are allowed to do/in what capacity/etc.; and make sure you do not say the wrong thing at any airport in the US, if it does not match what may or may not be 'sanctioned' by the VISA that you have.

    Happy Trail$$$!!!

    • 

      Smulder on 07/02/2018 - 07:54

      It is a self-assessment system, and there is nothing stopping you from lodging your tax return based on this conclusion that you have come up with for yourself. However, know that the ATO would likely disagree with you.

      • 

        GnarlyKnuckles on 07/02/2018 - 13:43

        '… know that the ATO would likely disagree with you.'

        I 'know' no such thing, quite the opposite - I don't think they would disagree at all. If it's a legitimate work expense, you can claim it; it's as simple as that, and I think it's a bit odd that some others are pontificating about 'proportions of the trip' with regard to airfares. That is of course of relevance to claiming for accommodation, but it is not relevant to claiming the airfares. In order to stop you claiming the airfares (100% of them), the ATO would need to mount a convincing case that you had not simply decided to go on holiday to the US first, and then sought out some sort of conference that could be used to misrepresent the airfares as a work expense. That would be quite hard for the ATO to do, unless you had done something really silly like post pics/evidence on Facebook that would incriminate yourself in this respect.

      • 

        Smulder on 07/02/2018 - 15:02

        +1

        The ATO does not have to prove anything. They can simply deny the claim. It is up to the taxpayer to prove the claim is justified.

        Certainly, if the purpose of the trip was for work, and any private portion was purely incidental, then he can claim 100% of the airfare.

        However, arguing that 15 private days out of 20 total days is 'incidental' is a weak argument.

        Ultimately, it will come down to what the travel diary shows he did on those 15 non-conference days, and what other evidence he can provide to support his claim.

        OP, whatever you do though do not tell the ATO that the purpose of your trip was because you "wanted to make use of the Qantas double status credit offer". That would not be helpful! :)