How Much Did Kenny Kim Write Off from Attending the WCI Conference?
Learn the Tax Rules to Maximize Travel Expense Deductions
I just returned from the White Coat Investor (WCI) conference.
While the conference was educational and provided great networking opportunities to meet like-minded physicians and dentists, it cost me money.
Thankfully, the expenses were tax-deductible against my tax business.
I want to review the travel expenses and the tax rules governing these deductions, which are found in IRC Section 162 and various subsections of Treasury Regulation §1.162 and §1.274.
The Most Important Element: Business Purpose
For any business deduction, there must be a clear reason why the expense was necessary.
The IRS requires that expenses be “ordinary and necessary.”
Ordinary – Common and accepted in your industry.
Necessary – Helpful and appropriate for your business.
In my case, I attended the conference to:
Network with other tax professionals who were also attending the conference.
Discuss my tax business plans with my business associates.
Learn about tax education provided at the conference to guide me in developing my tax education curriculum for physicians.
This established a valid business purpose for deducting these expenses for my tax business.
Understanding the Two Categories of Business Travel Expenses
It’s extremely important to understand that business travel expenses are divided into two categories:
Transportation Expenses
Examples:
• Uber to and from the airport
• Airfare to and from the conference
• Rental car to travel from the airport to the hotel and to the conference
For domestic travel, these expenses are either fully deductible or not deductible at all, which is why I call them “all or nothing” expenses.
Transportation expenses are 100% deductible if:
The primary purpose of the trip was to conduct business activities.
More than 50% of the travel days qualify as business days.
I’ll review what qualifies as a business day later.
Otherwise, transportation expenses are not deductible at all for domestic travel.
Survival Expenses
Examples:
• Meals (your meals, not those of family members)
• Lodging (hotel or Airbnb, but only a single-occupancy room if traveling alone).
These expenses are only deductible if incurred on business days, not personal days.
What Counts as a Business Day?
Travel Days: If you’re traveling for business, the entire day generally counts as a business day. For example, the day I travelled to the WCI conference and the day I travel back home would both count as travel days.
Work Days: If you spend at least four hours on business activities, such as attending the conference, the day qualifies as a business day.
Exception: If you are a speaker at the WCI conference, your presence is required, so you don’t need to speak for four hours or more to count as a work day. Running a 30-minute session would suffice.
Tried-to-Work Days: If a prearranged business meeting is canceled for reasons beyond your control (e.g., your business partner catches RSV), the entire day still counts as a business day, even if you did not conduct any business activities.
Sandwiched Weekends/Holidays: If business days are scheduled on both sides of a weekend or holiday, then the weekend or holiday also counts as a business day, even if no work is done.
Note: The above is not a comprehensive list of business day qualifications.
My Trip Itinerary and Expenses
Sunday 2/23: Flew out of SFO (travel day = business day).
Monday 2/24: Prearranged meeting for 4 hours with tax colleagues (work day = business day).
Tuesday 2/25: Prearranged meeting for 4 hours with tax colleagues (work day = business day).
Wednesday–Saturday 2/26–3/1: Attended the conference all day long (work day = business days).
Total: 7/7 days were business days.
A Hypothetical Twist:
Even if my colleagues had canceled the Monday and Tuesday meetings, those days would still count as business days under the “tried-to-work” rule.
Deductibility of My Transportation Expenses
My Transportation Costs:
Airfare: $500
Uber rides: $150 (home to airport & back)
Rental car: $150 (hotel/conference transportation)
Total: $800
Since more than 50% of the my trip consisted of business days, the entire transportation expense is deductible.
Result: I can deduct 100% of my $800 transportation expenses.
Deductibility of My Survival Expenses
Hotel: $1,400
Meals: $700
Total: $2100
Unlike transportation expenses, survival expenses are only deductible on business days. Since all 7 days of my trip were business days, I was able to fully deduct my survival expenses.
A Twist: The 50% Meal Deduction Rule
Travel meals are generally only 50% deductible and are deductible only on business days.
If I dine alone, I can deduct 50% of my meal cost.
If I dine with a business associate, I can only deduct 50% of the total bill—not 50% of my meal plus 100% of theirs.
My Deductible Survival Expenses:
Hotel: $1,400
Meals: $700 → $350 (50% deductible)
Total: $1750 (not $2100)
Another Twist: What If I Didn’t Prearranged Meetings on Monday and Tuesday?
If I had no prearranged meetings on Monday and Tuesday, those days would have been considered personal days, and my meals and lodging would not have been deductible.
Lost Deductions:
🚫 Two nights of lodging: ❌ $400 lost deduction
🚫 Two days of meals: ❌ $200 total, but only $100 would have been deductible under the 50% meal deduction rule.
Total lost deduction: ❌ $500
By prearranging two days of meetings (required just one email), I was able to create a $500 tax deduction, demonstrating the power of proper tax planning.
Even if those meetings were later canceled, the days would still count as business days under the “tried-to-work” rule, making me eligible to deduct my meal and lodging expenses.
What I Could Have Done Differently
Instead of flying back on Saturday, March 1, I could have scheduled another 4-hour business meeting on Monday, March 2, and flown home on March 3.
This would have created a sandwiched weekend, allowing me to spend Sunday, March 1, in San Antonio to explore the Riverwalk, relax, and even enjoy a margarita—all while keeping my travel deductions intact, since that day would have counted as a business day under the sandwiched weekend rule.
(Note: If the margarita was part of a business meal, it would be 50% deductible.)
Final Thoughts
When planning a business trip, it’s essential to understand the rules on what counts as a business day vs. a personal day.
Transportation expenses follow the “all or nothing” rule, meaning they are fully deductible if more than 50% of the trip consists of business days.
Survival expenses follow the pro rata rule, meaning they are only deductible on business days.
Understanding these rules will help you maximize your deductions and keep more money in your pocket!
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