Anyone who’s ever flown first class to Europe knows that it makes a difference. When you are gastronomically pampered with a five-course French meal, including a cheese selection and a buttery croissant, that is also expertly paired with a 68-degree Bordeaux or bubbly Comtes Grand Cru AND you get to eat with real silverware, well, you’re just this side of Heaven.
But after basking in the glow of a restful sleep that you were actually in the fully prone position for, you may wonder if you can, in fact, write the flight off your taxes. The answer, is both yes and no and comes with a side of caution. To the answer of whether you really are served such lavish treats in the air, the answer is yes, these and more, depending on the airline.
Yes you can write it off
Travel expenses when related to your job or business are typically tax deductible. You can generally write off any expenses that are ordinary, necessary and reasonable. This includes hotels or lodging, 50% of your meals, tips, transportation and computer or related rental fees.
If you bring a spouse or your children you cannot write off their tickets unless they work as your employees. In many cases the entire cost of a business class ticket can be written off.
First class to Europe doesn’t usually qualify as ordinary, necessary or reasonable, but it is not a hard and fast rule. If you need to get to Europe by Thursday for a meeting or business deal and the only seat left is in first class you’re going to have to take it. The reason most people avoid this is because this type of write off will usually send a red flag to the IRS. This makes you more likely to be audited.
No you can’t write it off
Did you spend more than seven days on your trip outside the U.S.? Were there other cheaper flights or seats you could have purchased? Was the trip more than half for fun and not for business? Do you want to avoid an audit? These are a few of the reasons your first class airfare to Europe or other international destination may not qualify as deductible.
Why you should proceed with caution in these waters
Filers who report incomes of less than $25,000 had the highest audits. Those earning $200,000 to $1 million were actually audited less than those earning under $25,000 in 2021 according to a TRAC study. According to Bloomberg Tax, there are several IRS audit triggers. Some of the biggest were those of net operating losses, substantial income and those who claimed the Earned Income Tax Credit (EITC). Not surprising, “lifestyle triggers” are also red flags, especially if your lifestyle includes luxury cars, high-end goods and first class international travel.