The tax laws tend to be very confusing. If you’ve ever tried to read any of the Internal Revenue Code or the IRS regulations, you know exactly what I’m talking about. After 30 seconds you’ll feel more confused than a New Jerseyan pulling up to a self-service gas station. That’s why it’s so surprising how clear the tax laws are when it comes to foreign business travel.

But what’s even more surprising is that these tax laws actually work in your favor. See, when tax laws are clear (and that’s not very often) invariably it’s not good for you. But that’s definitely not the case here. In fact, if you have your business and know the laws regarding foreign business travel, you may just be able to deduct most, if not all, of your expenses on that next trip to Israel, Cancun or Aruba.

Because these laws are so uncharacteristically beneficial to taxpayers, they almost seem too good to be true in some instances. That’s why I’ll break from my traditional writing and include the references to the relevant tax laws if you or your accountant want to verify them. Obviously, I am assuming you have a legitimate business reason to travel abroad—whether it’s meeting with clients, foreign colleagues, potential clients or scoping out a new business venture.

So without further ado, here’s a list of tax law’s greatest hits when it comes foreign business travel.

1. Deducting Airfare: In order to deduct the entire cost of airfare, more than 75 percent of your itinerary must be considered “business days” (Reg. Section 1.274-4(d)). So let’s say you take a 10-day trip to Israel. You need at least eight business days to deduct the full cost of airfare.

2. Business Days Aren’t What You Think They Are: First, you count as a business travel day any day when during normal business hours your principal activity is the pursuit of business (Reg. Section 1.274-4(d)(2)(iii)). In tax law, principal or primary merely means the majority, and in the U.S., our normal workday is eight hours. Thus, you only need to work four hours and one minute to call it a business day.

But the tax law’s definition of a business day gets even better than this. It also includes travel days (i.e. the days you fly to Israel and back; Reg. Section 1.274-4(d)(2)(i)). It includes days you tried to work but couldn’t do so for reasons beyond your control (i.e. your client never showed for the meeting; Reg. Section 1.274-4(d)(2)(iv)). It also includes Saturdays if you save money on your flight by staying over Saturday night, which is quite common with many airlines (PLR 9237014).

And here’s my favorite—it includes weekends and holidays when they are sandwiched between business days (i.e. if you work Friday and Monday, then Saturday and Sunday are considered business days; Reg. Section 1.274-4(d)(2)(v)).

So going back to our example of your 10-day business trip to Israel. We said you needed eight business days to deduct the entire airfare. Two of those days will be for traveling. If you work a Friday and Monday, then you not only tacked on another two business days but you can now include Saturday and Sunday as well because these are now “sandwich days.” So by working a Friday and Monday, you’re already up to six business days.

All you need to do is work two more days and you have the eight days needed to deduct the whole airfare. Think about it—you worked only four days out of a 10-day trip, but you can deduct 100 percent for this trip.

3. You Can Deduct a Ton of Stuff on Business Days: When your day qualifies as a business day under the tax laws, you can deduct a ton of expenses. Besides for meals and lodging (Reg. Section 1.162-2(a)), you can deduct the costs of sustaining life. These costs include transportation costs (IRS Pub. 463), cleaning and laundry (Rev. Rul. 63-145), telephone expenses (Reg. Section 1.162-2(a)), and tips to bellmen and taxi drivers (IRS Pub. 463).

4. Foreign Trips Less Than Seven Days: This rule may be the best one yet. You can deduct 100 percent of your airfare to a foreign destination when your trip involves at least one business day and is less than seven days, excluding the day of departure (IRC Section 274(c)). So let’s say you go to Israel from Monday until the following Sunday. Your only business meeting is on that Thursday. You can deduct the entire cost of the airfare.

By Daniel Magence, CPA, Esq.

Daniel Magence, CPA, Esq. is a principal at Pristine CPA Solutions, LLC (www.pristinecpa.com). Pristine CPA Solutions offers tax and accounting services to individuals and businesses of all sizes, whether it’s tax returns, bookkeeping, payroll services, or personal income budgeting. He can be reached at [email protected] or 201-326-6908 if you have any questions or comments, or are interested in using Pristine CPA’s services. Feel free to contact us for a free consultation.