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Convention Expenses- Self-Employed Individuals

This article is in response to your recent question about deducting convention and seminar expenses from your federal income taxes. The Tax Code allows you to deduct the cost of attending work-related conventions, conferences, and seminars, but your attendance at these functions must be related to your business and they must benefit your business activities.

The most important limitation to deducting convention and seminar expenses is that your attendance at the meeting will move your business forward. The IRS requires you to demonstrate a purpose that generates income for your assistance. For example, Alecia, an independent lawyer from Atlanta, attends a convention on international tax law in New York. Alecia does not practice international tax law, nor does it have clients in that field. Even though the convention is related to the law, Alecia cannot demonstrate any actual business benefit resulting from your attendance at the convention. Your assembly expenses are not proper deductions.

 

Convention expenses include: (1) registration and attendance fees; (2) air and rail tickets; (3) taxis and other local transportation; (4) paid telephone calls and computer rentals; (5) accommodation; and (6) fifty percent of the cost of meals (100% for food and beverage expenses provided by a restaurant paid or incurred in 2021 and 2022).

 

Remember to keep detailed records and a daily record of convention expenses.

 

Convention and meeting expenses incurred on behalf of your spouse or dependent are deductible if your spouse or dependent is your employee and he or she has a legitimate business purpose for traveling with you. Their trading partners are treated slightly differently. Expenses incurred by your business partners, such as your customers, customers, suppliers, agents, partners, or professional advisors, are deductible if they also have a legitimate business purpose for traveling with you.

 

Special attention is paid to combined business and leisure meetings. You can only deduct costs associated with the business portion of the convention. If no significant business activities are taking place during the time allotted for the meeting, for example, you are given videotaped presentations for you to view at your convenience, the convention is a personal journey and no deductions can be taken.

 

Special rules apply if you attend conventions outside of North America. The IRS is looking for a good reason to attend a conference abroad and wonders if you could have attended a similar conference in North America. If you are attending a business convention outside of "North America" (defined as the United States and its possessions (including Puerto Rico), the Trust Territory of the Pacific Islands, Canada, and Mexico), keep materials that show why your foreign location was necessary.