Yacht Crew Travel Expenses

by: Tom Andrews, CPA

A career as a professional yacht crewmember and travel expenses go hand in hand, while many crewmembers work for vessels that pay for all travel expenses I have encountered more and more crew over the past five years (mainly due to the recession and having to take on freelance work) incur higher travel expenses.  While unreimbursed travel expenses may be a deductible it is important that you keep the proper documentation to support those expenses.  In the event of an audit the burden of proof is on the taxpayer, simply telling an Internal Revenue Service agent that the folded up receipt you have is a deduction will not satisfy their skepticism and their job is to be skeptical.

With any travel expenses that you plan to write-off, you will need to be able to prove that the travel was directly related to your business, such as a product convention meeting with a client, or in the case of many of our clients travel related to the yacht they work on.

Flight costs typically aren’t a problem, even if you always fly first class. It’s the limo from the airport to the hotel that would be cause for concern as many of these costs are paid in cash so you need to get a receipt. Meals are deductible at a rate of 50% of the bill, if you are taking client to dinner, you will need to be able to show that you discussed business at the meal.

This is where a journal or electronic log really comes in handy. When traveling on business, be sure to document your daily events, like which clients you spoke to,  the ports of call you visited, where and when you met and what you discussed. Should you  ever be audited, the IRS may require you to produce such a journal.

Family vacations are not a tax deduction, unless your family members are part of your business. You have to justify that by holding business meetings or by all parties attending a business convention while on the trip. If you go to the Bahamas and lay on the beach all five days, chances are you really shouldn’t try to write that off.

As with all business related expenses, pay for your qualified travel costs out of your bank account or use your business debit/credit card (I normally recommend yacht crew members use a specific credit card or bank account for yacht expenses).  Also keep in mind that if your employer is reimbursing your expenses than you may not write those expenses off, if you do write off an expense that was reimbursed you must include that reimbursement as income.


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