by Dave Horwedel, EA and CEO of Torchlight Tax
If you run your own business and travel for work, you might be wondering if you can deduct the expenses of bringing your boyfriend or girlfriend along. If your boyfriend or girlfriend is truly working, and you document it correctly, the answer is “Yes.”
This article covers how and when this deduction is allowed, including what documentation is required, and what structures support this strategy.
When Your Boyfriend or Girlfriend Is Also an Employee
Make sure your boyfriend or girlfriend has a genuine business purpose for the trip, and you should be fine. Pay them for the hours they work as an employee at their regular rate.
If you do purely fun activities on the trip, like night clubbing or sightseeing, these expenses are not deductible. However, if you fly to Vegas and work during the day, and take an evening off, regular business and travel expenses are fine.
An ounce of prevention is worth a pound of cure. Holding a daily meeting, assigning tasks, tracking the work completed, and recording work hours will probably be enough to satisfy the IRS. If you are audited, and you can show you both worked 40 hours per week while out of town, your travel expenses should be covered. Just don’t include the nightclub tab as a business expense!
Keep a daily expense record on a computer or in a book while you are on the trip.
If these conditions are met, you can deduct the usual business travel expenses such as:
● Transportation
● Meals
● Hotel stays
● Incidental costs like dry cleaning or business calls
When Your Boyfriend or Girlfriend Isn’t an Employee
If your boyfriend or girlfriend isn’t an employee for your business, you can assign them as a temporary employee for the trip. This may require:
● Using a payroll service
● Tracking hours if paid hourly
LLCs and Corporations can also be used here. An LLC can be treated as a sole proprietorship (aka disregarded entity), a partnership, an S Corporation, or a C Corporation.
Corporations generally have requirements to have formal employees with payroll tax filings and W-2s, etc. So, if you and your boyfriend/girlfriend are working in the corporation, you may need to pay yourselves on a W-2, regardless of your travel expenses.
There are many variants of these strategies. Maybe you are a business consultant, and your boyfriend or girlfriend has a company that does administrative office support. Both parties could establish LLCs or corporations, with your company:
● Covering business travel expenses
● Providing payment for administrative support to the partner’s company
There are many ways to document legitimate business expenses.
Facts and Circumstances
The IRS has a phrase they like to use: “facts and circumstances,” i.e., “What is really going on?”
If you want to spend a week in Hawaii and bring your boyfriend or girlfriend along for fun, then this does not support a deduction.
If you are hosting an event or attending a conference there, and your partner is going to be working with you for real, this does support a deduction.
One Last Point
Taking your boyfriend or girlfriend along with you on a business trip is a great idea.
Actually working together on a business trip can benefit both your relationship and your business. Not everyone can do this. But if you can work together on a business trip and still have time for fun on your off hours — great.
If either of you are married, bringing the spouse along is generally not recommended, but this is not a tax issue. (LOL!)
Our job at Torchlight Tax is to legally save your tax dollars without cheating or putting you at risk, while making the tax filing process as pleasant as possible. So if you and your boyfriend or girlfriend can travel to pleasant locations for business purposes, legally save tax dollars, and have fun — this aligns with our purpose.
What to Do Next
Contact Torchlight Tax for a free consultation at 877-758-7797 or email info@torchlighttax.com.
You are of course welcome to contact Torchlight Tax to simply do your tax preparation and filing.
We also have hundreds of tax articles and videos on our website and Torchlight Tax YouTube channel. You are welcome to visit these and increase your tax knowledge.
Disclaimer: This article is for informational purposes only and does not constitute legal or tax advice. Please consult a licensed tax professional for advice specific to your situation.
