Would buying luggage be a business expense for tax deduction purposes?

What if I bought a really expensive designer luggage? Is there some kind of "lavish or extravagant" limit to what the IRS considers reasonable? Also, would it be better to just have separate luggage for business vs personal to make it cleaner for tax purposes?

There is indeed a "lavish or extravagant" standard the IRS applies - they won't allow deductions for unreasonably expensive items beyond what's ordinary and necessary for your business. A $245 roller bag sounds reasonable, but a $3,000 designer luggage might raise flags unless you can justify why such an expensive item is necessary for your specific business needs. Having separate luggage for business and personal use is definitely cleaner for tax purposes. If you have luggage used 100% for business, you can deduct the full cost (subject to depreciation rules). This eliminates the need to calculate usage percentages and makes documentation simpler if you're ever audited.

Does taxr.ai actually look at pictures of your receipts? Or do you just type in the info? I've got a stack of business receipts I've been putting off dealing with and wondering if this could help.

How accurate is it compared to going to an actual tax pro? I'm always hesitant with AI tools for tax stuff. Any chance it gives overly aggressive deduction advice that could get flagged?

Yes, you can actually upload images of your receipts and it will scan them for relevant information. It's been a huge time-saver for me since I don't have to manually enter everything - especially helpful with those faded receipts that are hard to read. It's pretty conservative with tax advice in my experience. It clearly explains what's deductible and what's in gray areas, along with documentation requirements. I've found it references specific IRS publications and tax court cases when answering questions, which gave me confidence in the advice. It's not replacing my accountant, but it helps me organize everything properly before I send it to her.

Wait, you actually got through to the IRS? I thought that was impossible these days! How exactly does this service work? Do they just keep dialing for you or something?

Sounds like BS marketing to me. The IRS is impossible to reach and no magic service is going to change that. I bet they just take your money and then you're still waiting for hours.

They basically use an automated system that navigates the IRS phone tree and waits on hold for you. Once they reach an agent, you get a call connecting you. It frees you from having to sit there listening to hold music for hours. I was super skeptical too at first. I'd spent two different days trying to get through myself and gave up both times after 2+ hours. The service got me connected in about 35 minutes, and I just went about my day until my phone rang. Was definitely worth it for me since I needed specific guidance on several business deduction questions including the luggage issue.

Does the photo thing really help? Seems like you could just say any trip was business related. How would the IRS even verify that?

The photos themselves aren't about proving business vs personal use - they help establish that you actually own and use the luggage for travel. Combined with other business records (hotel receipts, flight itineraries for business trips, meeting agendas, etc.), they form part of your documentation package. You're right that photos alone wouldn't be sufficient. The IRS would look for consistency between your claimed business trips and other evidence like your travel reimbursements from work, calendar entries, email correspondence about business meetings, etc. This is why I maintain the spreadsheet with dates and business purposes alongside traditional travel documentation. My accountant calls it creating a "pattern of evidence" that supports your claims.

Yes, there's a big difference! Self-employed people (Schedule C filers) can deduct business expenses directly. W-2 employees can no longer deduct unreimbursed employee expenses since the 2017 tax law changes, with few exceptions (certain types of performing artists, reservists, etc.

This is really helpful advice! I'm new to dealing with business expense deductions and this kind of breakdown makes it much clearer. Quick question - you mentioned checking with the employer about travel policy reimbursements. If my company has a policy but I've never used it (didn't know about it when I bought the luggage), does that still affect my ability to deduct it? Or is it only if I actually received reimbursement? Also, any recommendations on the best way to track business vs personal trips? I like your phone notes idea but wondering if there's a more formal way that would look better in an audit situation.

Good question about the employer policy! Generally, if you didn't actually receive reimbursement, you can still deduct the expense. The key is whether you were *entitled* to reimbursement but chose not to claim it. If your company would have reimbursed the luggage purchase but you simply didn't know about the policy, most tax professionals would say you can still deduct it since you paid out of pocket. For tracking, I'd recommend something more formal than phone notes for audit protection. A simple Excel spreadsheet works great - columns for Date, Trip Purpose, Destination, Business/Personal designation. You can even add a column for supporting documents (flight confirmations, hotel bookings, etc.). The IRS likes contemporaneous records, so try to log trips soon after they happen rather than reconstructing months later. Some people use apps like Shoeboxed or even just a Google Sheet that syncs across devices. The important thing is consistency and detail - "Client meeting in Denver" is better than just "Business trip.

This is incredibly valuable insight from someone who's actually been through an audit! The tip about keeping a photo of the broken luggage is brilliant - I never would have thought of that but it makes perfect sense for establishing business necessity. I'm curious about the spot-checking process you mentioned. When they reviewed 6 months of your travel records, were they looking at consecutive months or did they pick random months throughout the year? And did they require receipts for every single business trip, or were they satisfied with broader evidence like email confirmations and calendar entries showing business meetings? Also wondering - during your audit, did having that established pattern of regular monthly business travel actually help your case, or did they scrutinize it more because of the frequency? I do travel monthly for client sites so this could be really relevant for my situation. Thanks for sharing your real-world experience - this kind of practical advice is so much more helpful than the generic tax guidance you find online!

@da3c09432493 Great point about documenting the business necessity! I hadn't thought about keeping evidence of why I needed the replacement luggage, but that makes total sense. Unfortunately I already tossed my old broken bag, but I'll definitely remember this for future purchases. Your experience with the audit sounds nerve-wracking but also really informative. Did you feel like having all that documentation made the process smoother, or was it still pretty stressful even with good records? I'm trying to decide how detailed to get with my record-keeping - sounds like more is definitely better when it comes to the IRS! Also wondering if you had any issues with the "lavish or extravagant" standard that was mentioned earlier in the thread, or if your luggage costs were considered reasonable by the auditor?

@da3c09432493 This is exactly the kind of real-world experience I was hoping to find! Your advice about documenting the business necessity is spot-on. I actually still have my old broken luggage sitting in my closet - guess I should take a photo before I toss it. The point about established patterns of business travel is really reassuring. I've been doing these monthly client visits for about 3 years now, so there should be a clear pattern in my records. I'm wondering though - when you were audited, did they ask for supporting documentation going back multiple years, or just the tax year in question? Also, did you end up needing professional representation during the audit, or were you able to handle it yourself with good documentation? I'm trying to prepare for the possibility but hoping my straightforward situation won't require hiring a tax attorney. Thanks for sharing these insights - it's giving me much more confidence about claiming this deduction properly!

@da3c09432493 Thank you so much for sharing your audit experience - this is incredibly helpful! I'm in a similar situation with regular business travel and was worried about how to properly document everything. Quick question about the spot-checking process: when they reviewed your 6 months of records, did they give you advance notice of which months they wanted to see, or did they ask for everything and then focus on specific periods during the review? I'm trying to organize my records and wondering if I need to have everything perfectly documented or if I can focus on having solid documentation for the most recent periods. Also, you mentioned they wanted evidence you actually took the luggage on business trips. Did they accept things like boarding passes and hotel check-ins as proof, or were they looking for more specific evidence that the luggage was present? I keep most of my travel confirmations but never thought about documenting the luggage itself on each trip. Your point about the established pattern helping your case is really encouraging - I've got three years of consistent monthly client visits, so hopefully that works in my favor if I'm ever questioned.