We pride ourselves as one of the best accounting firm in San Francisco for dealing with international tax issues. Many of our clients straddle the continents. For example, we have many clients who live part of the year in San Francisco and part of the year in Beijing China. And we have clients who spend part of the year in San Francisco and parts of the year in Frankfurt Germany. San Francisco is a very international city, and we even have expatriates from Canada for whom we do their taxes. In fact, we are becoming known as the best CPA firm in the San Francisco Bay Area for expatriate and especially Canadian tax preparation.
The world is becoming smaller by the day. Not only do we have air travel, but also we have the Internet, and its co-mingling of everything. Not only can you wake up in the morning in San Francisco and yet spend the night in Beijing China, but the Internet can co-mingled your personal and your private life.
Taxes and International Travel: Good Record keeping is Key
Taxes, however, cannot wait it. One of the newer issues is the interrelationship between foreign business travel and sightseeing. Let’s face it. If you live in San Francisco, and go back to China, you will certainly want to see some sights. Who would not want to see the Forbidden City on a trip to Beijing? However, here comes the taxman. Is that trip primarily for business, or primarily for pleasure? What percent is primarily for business, in what percent for pleasure?
Or, let’s assume, that you travel back Berlin, Germany. Who would not want to take in the sights of the German capital? However, again the question becomes in your travel from San Francisco to and from Berlin, what percentage of that travel was for business versus what percentage of that travel was for pleasure?
IRS Guidelines on the Deductibility of Foreign Travel
The IRS has guidelines on travel, that will help you determine the tax implications in the deductibility of expenses. However, with some foresight, and some good record-keeping, you can push the envelope as far as possible in a legal way. If you keep good records, you can substantiates the business nature of your travel. If you do not keep good records, unfortunately, the IRS will err in its favor and look at much of that travel as non-business-related.
Part of our job as the best international tax accounting firm in San Francisco is to advise our clients on how to minimize both the US and foreign taxes. Even the little details, such as how to keep records about foreign travel, can have a big impact for your business. And this is not to mention just for the business owner, but for your employees as well.
Unfortunately, accurate record keeping is the magical key to be able to deduct as much as possible from both domestic and international travel. If you have questions about international tax, please reach out to our office or a consultation