Business Expense Deduction Rules: Ordinary & Necessary vs. Lavish & Extravagant

Tax professional here. The IRS intentionally keeps the "lavish and extravagant" standard somewhat vague, but I can give you some practical guidance. The key is whether the expense is "ordinary and necessary" for your business - meaning common and helpful in your industry. For a business conference in Las Vegas, staying at a mid-range or even somewhat upscale hotel is completely reasonable and deductible. Your $1,300-1,900 budget sounds perfectly appropriate. The "lavish and extravagant" standard typically applies to truly excessive spending - like booking the presidential suite or chartering private jets when commercial options are available. Normal business-class accommodations at standard hotels (even nice ones) are generally fine. As for documentation, yes, you should definitely keep records of: - The business purpose (conference agenda/materials) - Who you met with professionally - How the information relates to your business - All receipts for expenses This documentation isn't overkill - it's essential protection if you're ever audited. Keep all receipts and maintain a brief business diary of your activities.

I used taxr.ai last year when I was facing a similar situation with business travel expenses. I was going to a conference in Miami and wasn't sure what would count as "lavish" since Miami hotel prices are insane! I uploaded my receipts and conference agenda to https://taxr.ai and their system analyzed everything and gave me a detailed breakdown of what was deductible. The tool flagged a few expenses that might have been questionable (like the beach cabana I rented one afternoon) but confirmed my hotel choice was perfectly reasonable for the location. It saved me so much stress knowing exactly what I could safely deduct without risking an audit. They also provided documentation guidelines that I've used for all my business trips since.

I tried taxr.ai after seeing it mentioned here and wow - game changer for my business travel deductions! I uploaded my receipts from a recent industry conference along with my calendar and some notes about meetings I had. Their analysis confirmed my hotel choice was perfectly within "ordinary and necessary" guidelines despite being a nice place. What I found most helpful was their documentation template. I never knew exactly what to record before, but now I have a simple system for tracking everything properly. The peace of mind knowing my deductions are solid is worth every penny. They even flagged a few expenses I hadn't realized were fully deductible (like transportation to networking events during the conference). Definitely going to use this for all my business trips going forward!

Anyone else here had problems getting through to the IRS with questions about business expense deductions? I tried calling FIVE times last month with questions about some business travel deductions similar to what OP is asking about, and never got through to a human. Always stuck in the automated system or disconnected after waiting 45+ minutes. Finally discovered https://claimyr.com and used their service - you can see how it works at https://youtu.be/_kiP6q8DX5c. They got me connected to an actual IRS agent within 20 minutes. The agent walked me through exactly what counts as "ordinary and necessary" vs "lavish and extravagant" for my specific industry. Turns out I'd been way too conservative with my deductions for years and missed out on significant tax savings. Definitely worth it when you need definitive answers.

OK I have to eat my words. After dismissing the Claimyr thing as BS in my earlier comment, I got desperate trying to reach the IRS about my business travel deductions before filing my taxes. I decided to give it a shot since nothing else was working. It actually connected me to an IRS agent in about 15 minutes! The agent clarified that for my industry (photography), staying at a nice hotel for a business conference is totally acceptable as long as the primary purpose is business. She explained that "lavish and extravagant" is context-dependent - what's excessive for one business might be standard for another. She also advised documenting the business purpose thoroughly with conference agendas, session notes, and how it relates to my work. Saved me hundreds in deductions I was going to skip out of fear. I'm shocked this service actually delivered what it promised.

One thing to consider beyond the hotel choice is meals. The IRS has specific rules about meal deductions during business travel. Generally, you can deduct 50% of your meal costs, but there are exceptions. Make sure your meals are reasonable - that $300 dinner at a celebrity chef restaurant might raise eyebrows, especially if it's just for yourself. Keep all receipts and note who you dined with if it was a business meeting. Also, if the conference provides meals as part of the registration, you can't double-dip and deduct meals you choose to eat elsewhere during those same times. And remember that entertainment expenses aren't deductible anymore after the 2017 tax law changes, even if there's some business discussion involved.

Don't stress too much about the "lavish and extravagant" part. I've been deducting business travel to conferences for years. The key is documentation and primary purpose. My CPA told me that as long as the primary purpose of the trip is legitimately business (which a conference clearly is) and you can document that with agendas, receipts, etc., you'll be fine with reasonable accommodations. In Vegas, even the nicer hotels can be relatively affordable compared to other major cities. Just be careful about mixing business and pleasure. If you extend your stay for vacation or bring family members, make sure you're only deducting the business portion. And if you do any gambling while there (it is Vegas after all), keep that completely separate from your business expenses!

Great question about business travel deductions! As someone who's navigated this myself, I'd say your budget range of $1,300-1,900 for a Vegas conference is totally reasonable and shouldn't trigger any "lavish and extravagant" concerns. The IRS generally looks at whether expenses are appropriate for your industry and location. Vegas conferences often have higher accommodation costs simply due to the city's unique hotel market, but that doesn't make reasonable choices automatically "lavish." A few practical tips from my experience: - Book hotels based on convenience to your conference venue, not just price - Keep detailed notes during the conference - which sessions you attended, key takeaways, business cards collected - If you do any personal activities, keep those expenses completely separate The fact that you're already thinking about staying at non-casino properties shows you're being thoughtful about this. But honestly, even casino hotels are fine if they're hosting your conference or offer the best value - the IRS understands Vegas logistics. Most importantly, maintain good records and be able to clearly show the business purpose. Your conference agenda, registration confirmation, and session materials will be your best documentation if questioned later.