While tax law

allows deductions for the business portion of your trip, you must bear

the burden for personal expenses. Be aware, too, that Internal Revenue

Service rules differ depending on whether your destination is domestic

or foreign. Here's what CPAs say you should know before finalizing any

reservations.

When traveling

within the U.S. and mixing business and personal activities, you can deduct

100 percent of travel expenses to and from the destination if the trip

is primarily related to your business. Lodging, 50 percent of meal costs,

and other qualified business expenses also are deductible for the days

you spend on business, but only to the extent that they would have been

incurred if the trip had been totally for business.

There are no

hard and fast rules for determining whether your trip is primarily for

business or pleasure. However, CPAs typically agree that the determining

factor is how much time you spend on each activity.

For example,

if you spend six days on business and three days vacationing, you may

deduct the full cost of getting to and from the business destination,

even if you spend the last three days on the beach. Travel days count

as business days when making your calculation.

Reverse the

allocation between business and pleasure (three days on business and six

on pleasure) and none of your travel expenses would be considered deductible.

However, you could write off any expenses you incur at your destination

that would qualify as business deductions.

If, for example,

while you and your family are vacationing in California, you take a customer

out to lunch to discuss business, your transportation to and from the

customer's office and 50 percent of the meal cost would qualify as a deductible

business expense.

When staying

over on Saturday night results in a lower airfare and net cost savings,

you may deduct 50 percent of meal costs, lodging, and other business related

expenses incurred for the additional night. This is because the stayover

has a business purpose of cutting travel costs.

When your destination

is on foreign shores, you must allocate your travel expenses in proportion

to the number of days you spend on business and personal activities. However,

several exceptions to this rule apply when traveling abroad.

First, you

don't have to follow the allocation rule if you were out of the country

for seven days or less (not counting the day you left the U.S., but counting

the day you return to the U.S.). That means you can fly to London for

a four-day meeting and sightsee for two days, and your travel expenses

are deductible.

The allocation

rule also does not apply if you were out of the U.S. for more than a week,

but spent less than 25 percent of your time on non-business activities.

(In this case, both the day of your departure and the day of your return

count as business days.)

Additionally,

you're exempted from the allocation requirement if you had no substantial

control over the arrangement of the trip.

In the event

you don't meet these requirements, tax law requires that you allocate

your travel costs between your business and personal activities to determine

the deductible amount.

Pack the family

into the car for the business/vacation destination, and you can deduct

the total cost of driving back and forth.

Tax law recognizes

that you would have incurred the same expenses if you were traveling alone

and, therefore, allows the deduction.

If you fly

to your destination, only your airfare is deductible. When you share your

hotel room with family members, you may deduct the cost of what you would

have paid for a single, rather than double, room. Typically, this is more

than half the cost. For example, if the hotel charges $160 for a double

and $140 for a single, you could deduct the single rate of $140, rather

than half the double rate ($80). Just be sure to ask the hotel to note

the single rate on your bill.

Keep in mind

that the IRS pays close attention to deductions claimed for business travel.

CPAs recommend that you maintain a log to substantiate your business activities.

Include the dates of departure and return, the number of days spent on

business, and the reason for the travel.

You also may

want to consult with a CPA in advance of your trip to determine your eligibility

for certain deductions.

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