I make it a point to travel at least once a quarter. I love to travel so much, some might say, I work for my next vacation. One benefit of being an entrepreneur is having the freedom to set my own schedule.
So, if I want to take two weeks to explore a new country, I plan for just that. But I am going to tell you a little secret. A lot of my trips go from personal to business real quick. I've found a way to combine business and pleasure.
Believe it or not, you can legally write off trip expenses. Read this article to discover how trips can grow your business, help you enjoy yourself, and be a tax deduction. You only live once (YOLO), so live your best life on vacation and do a little business too.
Attend a Conference
Rule number one to writing off a trip as a business expense is to do some business on the trip. I know this seems obvious, but I had to say it. Otherwise, you might try to write off every adventure or weekend getaway.
The easiest way to write off a trip is to attend a conference related to your industry or niche.
Conferences are a great way to explore a new place, network, and increase your net worth. You can also learn what's new in your field and generate new business.
Plus, at night you can take over the town, try out the hottest restaurants, or see the sights. Doesn't everybody have to eat? You can invite all of the new friends you meet at the conference to explore the town with you.
Then come tax time you can deduct the conference registration, 50% of the meals, flight, hotel, and so much more. Plus, if you are at the top of your game, you don't have to only attend the conference. You could be a keynote speaker for the event. Either way, expenses incurred on the days you attend the conference, conducting business are deductible.
Meet with a client or prospective client
Do you want to be an entrepreneur with clients in every area code? Start using trips as a chance to expand your business. Set up business meetings with existing or prospective clients in cities where you travel.
Arrange business meetings at the beginning and end of your trip. Then, squeeze your vacation days in the middle. This strategic planning helps you justify writing off the travel costs to and from your destination. You can also write off mileage or taxis to and from the meetings, meals, hotels, and more.
Take the Team
As the CEO of your company, you set the vision for your business and the priorities. However, it doesn't hurt to have some help brainstorming new ideas for the business with company board members.
Host your annual meeting away from your home office say in Mexico, Jamaica, or California. If you do, you can write off your expenses for the breakout sessions, conference space, or travel costs. As a business owner, you need to operate as a business, and annual meetings are required.
Beware of Uncle Sam's Fine Print
As your personal tax expert, I can help you figure out what expenses pass the IRS test. It's important to note everything is not tax-deductible. For example, when you take the family, you cannot write off their amusement park tickets at a conference in Orlando.
Your expenses have to have a business case and seem ordinary or necessary. So ordering dozens of bottles of Dom Perignon at lunch might not pass the IRS test. Yet, people have successfully claimed crazy things.
Domestic travel in the United States versus international trips are treated differently. In the United States, you have to spend 50 percent or more of your time on business. Otherwise, it's not tax-deductible. However, if you cross an ocean, deductions are based on the portion of the time you spend working. For example, if you work 40 percent of the time in Greece then 40 percent of the trip is tax-deductible. The other 60 percent of the time you can bask in the sun but you can't write it off.
Lastly, document, document, document. Keep receipts from hotels, meals, and other expenses. Maintain a log of what meals you have with clients. Also, keep a log of how many miles you drive to work-related meetings. The more details, the better.
YOLO, Pack Up and Go
Now that you know how to turn any vacation into a business trip, pack up and go. Find a balance in your activities, so the trip is fun for you and enhances your company.
Want more time to focus on your business? Then, hire a tax pro to help you with your company finances. Contact me, for a free consultation. At my firm, we provide tax and financial planning all year to creatives and entrepreneurs.
So, where are you headed for your next vacation, I mean, business trip?