The short answer is make it a business trip!
Ever wonder why so many people go on vacation in Las Vegas or on an industry-related cruise? Because by making it “just another business trip” it can be written off as a business expense. And this isn’t something that only the wealthy can do. It’s a simple, totally legal, tax hack that anyone can do.
Here’s how it works –
- First you need a business (more on this shortly)
- Next you need to find an industry related convention or training course in a nice vacation spot. Somewhere you want to go.
- Then you book a nice hotel room or suite that just happens to big enough to fit the whole family.
- Next you go to the convention whilst at the same time enjoying your lovely pre-tax vacation. Your partner or family can also enjoy lounging by the pool whilst you attend all the events provided by the convention (you are going to the convention right? Hint Hint). Remember your flight is tax deductible as are other business related expenses incurred at the convention (vacation). Note: If your partner is charging cocktails to the room whilst you listen to the latest and greatest in your industry then these should probably be listed as personal expenses. Be careful there.
- Finally when you get home you make sure to properly account for all those costly convention/vacation expenses.
- And then at the end of the tax year you do your taxes (or send the paperwork to the accountant) and you pay with your post-vacation profits.
In comparison lets have a quick look at how the regular employed person might book their annual vacation –
- Go to work.
- Get paid (with taxes deducted at source)
- If there’s anything left, book a vacation and hope it doesn’t rain that week.
Doesn’t sound as good as our first option? But now you know how the wealthy do it. They book their “vacation”, (ahem business related trip) enjoy it and then pay taxes. The working classes go on vacation with money that may or may not be left AFTER their taxes are all paid. Hmmm I know which camp I would rather be in.
Now before I continue I must point out that I am in no way shape or form a tax professional of any kind. So before you do what I suggest you should definitely look into the legalities of the above in the tax jurisdiction in which you reside. You will probably also have to make sure that business expenses and personal expenses are kept separately etc…
Okay tax warning over, lets have a look at some questions…
- But I’m employed. How can I do this? Well just because you have a JOB doesn’t mean you cant also have a separate side hustle or business that every once in a while requires you to attend an industry specific convention. Now just note in most tax jurisdictions you cant just say “Hey I’m self employed’ and deduct the Vegas trip. There usually has to be some reasonable expectation of income from the business. That usually means you are doing things that will eventually gain you some sort of income. For example – you start up as a wedding photographer, and book 2 weeks at the Wedding Photographers convention in Miami! Don’t just leave it at that. You should also be buying equipment, building a portfolio, advertising, booking weddings… all the standard business related things a pro Photographer would be doing (Hint: Keep a business journal to document all your day to day activities as proof).
- But I don’t have any other skills, what business could I start? Well here at Wealthy Tricks one of our stated goals is to point you in the right direction of some nice wealth producing side hustles (Wealthy Tricks is all about how to GET RICH as well as how to STAY rich)…. but that’s for another post… Suffice it to say at this point there are probably lots of things you could do on the side, many of which only need a computer such as Writer, Blogger, Travel Podcaster, Instagram Influencer, Proofreader, Copywriter, Photographer… and the list could go on for quite some while. And all of these will have some interesting training courses or conventions in some very interesting parts of the world.
- And finally how do I find these amazing vacations… sorry conventions? Again super simple. Just search for your industry followed by an event keyword such as “convention’, “training” etc. You can also look for industry associations, check out the association website and look to see where they are all going this year or next. I can almost guarantee it will be somewhere nice. Another trick is to search for a convention centre in the vacation town of your choice, then find the list of upcoming conventions and see if any are appropriate for your business.
Now obviously the whole point of an industry convention is that you should show up and learn something, catch up with other attendees and generally engage in business related activities. But what your family do whilst you are there, what you do in the evenings or any days where there are no events of interest is entirely between you and your tax professional.
Enjoy your vacation business event!
PS – For a double whammy consider using your Business Amex Bonvoy card. Then not only are all your business expenses deductible but you also accrue points to use on your next vacation or business trip…. and did I mention the free upgrades… 🙂