With the holiday season's arrival, many Canadians are intending to take some time off from their business or their employer so that they can enjoy the season with their family and friends. And while fewer individuals will be traveling on their breaks from work life, they will be increasing how much they spend, based on recent polling data, which they may be able to use as a tax deduction in certain circumstances.
Approximately 1 in 5 Canadians plan on traveling during the Christmas and New Year's holiday, according to newly released survey statistics from the Canadian Imperial Bank of Commerce. That's down from an average of 25% when a similar poll was performed at this time last year.
Of those who are going away for several days or weeks, they plan on spending approximately $1,500 on their trip overall, an increase of 3% from what the average was last year, the CIBC poll revealed. While the majority of respondents will stay inside the country, as many as 40% are expected to travel to another part of the world.
Steve Webster, CIBC vice president of travel cards, said that no matter how long Canadians plan on being away, they should be sure to make a checklist to be sure they bring everything they need.
"Peace of mind while on vacation is important," said Webster.
He added that in addition to some of the basics that travelers bring, they should also make financial preparations, like letting their credit card issuer know that they'll be on vacation so that they're aware of purchases that may seem out of the ordinary. They may also want to see if their provider offers medical coverage. Financial experts also say that for business-related trips, all expenses should be recorded for tax write-off purposes.
Roughly one-third of respondents in the poll said that their top concern is getting sick or injured while on vacation, with 10% being worried about losing their money or credit cards. Lost luggage was also a top fear of what may happen while on vacation.
Europeans Get Most Vacation Time
Compared to other parts of the world, North Americans don't vacation all that much. In a poll of approximately 7,900 employed adults in two dozen countries - including Canada, the United States, and several countries within Europe and South America - Europeans take more vacation time than their contemporaries, thanks in part to being given more paid time off than their peers.
John Morrey, vice president and general manager of Expedia.com, which commissioned the poll, said that business owners might want to take more time off themselves or give their workers added vacation pay, because virtually every objective analysis suggests that it leads to greater happiness and productivity.
"Somewhere between 80% and 90% of people worldwide say that vacations make them feel happier, better rested, closer to their family, less stressed, and more relaxed," said Morrey. "These are all emotions that correlate to a productive employee. So it's almost paradoxical: spend more time away from work, and you might just be a better performing employee."
Depending on the circumstances, traveling for vacation may be tax deductible, particularly for those whose jobs require them to be on the road much of the time. For example, you may be able to write off business expenses if you're combining business travel with personal time off. The key is to track all of your expenses so that a qualified tax professional can assess them to see what costs are deductible and which ones aren't. For example, if you go out to eat with business associates and it's for business matters, the company may be able to pick up a percentage of the tab.
For more information on tax deductions when traveling, speak with an FBC tax accountant.