How to Profit from the Tax Write-Off for Conventions and Trade Shows

Thanks to Uncle Sam, you can deduct certain trade show and conference expenses from your income tax filing. Learn what’s deductible — and what’s not.
Aug 18, 2008

By Mark E. Battersby

Imagine an enjoyable — and educational — vacation with Uncle Sam picking up part of the tab. That's right, every decorated apparel business, the owner and employees of that business (even someone who is a shareholder/employee), can legitimately claim an income tax deduction for the expenses paid or incurred in attending trade shows, conventions and meetings.

Naturally, there are restrictions. A major downside to the convention expense deduction is that it is not available for the expenses of attending a convention or meeting related to investments or other income-producing property. Fortunately, however, usually all that is required to qualify for convention-related tax deductions is that you be able to show, if asked, that attending the trade show, meeting, convention or other event benefited your screen printing or embroidery business.

What’s Deductible
Under current tax rules, the transportation expenses incurred while traveling to the site of that convention, trade show or event are tax deductible. Also included among the tax deductible expenses are the amounts spent for taxicabs, commuter buses and airport limousines once you arrive at your destination. And let’s not forget the costs associated with attending the convention itself.
In addition to the cost of getting to that convention site, the cost of meals en route and during your stay also is deductible. If you are away from home overnight or long enough that you need to stop for sleep or rest, lodging also is a legitimate deduction.

Meal Options
When it comes to meals, the tax rules contain quite a few restrictions — and a number of loopholes. Generally, expenses for meals include all amounts spent for food, beverages, taxes and related tips. That tax deduction for meals is considered “entertainment,” however, and is limited to 50% of the amount actually spent.

Under the tax rules, an attendee can use either the actual cost of the meals or a standard amount in order to compute the convention-related meals expense. If you, as an individual, are reimbursed for those expenses, how you apply the 50% limit depends on whether your employer's reimbursement plan was accountable or non-accountable.

Pitfalls
If an attendee's spouse, family member or other person accompanies the attendee to a convention, the attendee or the imprinted sportswear business can deduct their travel expenses only if they are an employee of the business; have a bona fide business purpose and would otherwise be permitted to deduct the show expenses.

Although the tax rules do not require a receipt for expenditures of less than $75, a decorator should be able to prove that trade show or convention-related expenses were actually paid or incurred. In fact, the following expenses, which are deemed by the IRS as particularly susceptible to abuse, must generally be substantiated with adequate records or sufficient corroborating evidence:
•    expenses with respect to travel away from home (including meals and lodging),
•    entertainment expenses
•    and business gifts.

Imagine reaping business benefits, an education and enjoyment wrapped up in one trip to a convention, trade show or meeting. And, best of all, those expenses may qualify as a legitimate tax deduction.

Mark E. Battersby is a professional writer based in Ardmore, Pa., specializing in business and tax issues. To contact him, email: MEBatt12@Earthlink.net.

Editor’s note: Because tax laws are subject to change and often open to interpretation, it is always advisable to seek the advice of a professional accountant to be sure your filing is in compliance with the code.

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