Whenever I ask the question at our live events, “Who likes to travel?”, every hand goes up and the room brightens. When I follow it up with, “How come you’re not traveling as much as you’d like?”, it boils down to two major things – time and money.
However, would you like to go on an exotic trip and experience what Mexico, Brazil, China, Australia or Europe have to offer? Aren’t you just really tired of too many “stay-cations”?
How about this. Plan an exotic trip and write off this vacation on your taxes. Sounds too good to be true? Yes, Uncle Sam will be your partner in such an escapade! Why? Expenditures for tourism and travel is very healthy for the economy.
Wherever we talk across the country people always come up to ask us about the exotic trips my wife and I have been able to take. Here’s what I’ve experienced since choosing the path of entrepreneurship.
First, I’m thankful for being exposed to the wealthiest industry – the financial services industry in the late 90s, while I was still on active duty in the Marine Corps. It is an industry that rewards their top performers, in addition to planning or mastermind retreats with exotic travel all over the world. Here’s one the trips I took to the Bahamas, on this “tax-deductible” exotic trip write off.
Secondly, a by-product of being the financial services industry and being an entrepreneur, is that it forced me to improve my professional associations. I learned quickly that I didn’t need to be the smartest person to help my clients or grow my business, I just needed to know who to ask and find answers to questions that were above my current understanding.
Here’s another trip I took last year with PHP Agency, Inc to Dubai. Crazy part about this was that over 20 years ago I was in the Persian Gulf War IN the Persian Gulf aboard the USS Tripoli. Because I decided to become a veteran entrepreneur, I return with my wife 20 years later with 32 of our best friends in business aboard an 82 foot yacht.
OK, OK, I know! Let’s get to it!!
How to write off exotic trips using the one week loophole!
I have always said that we have fabulous tax laws. What I am going to discuss today will be one of the lessor known great tax laws available to many of you.
Generally, you can deduct your transportation expenses based on the percentage of business days to your total days away from home. HOWEVER, there are two huge exceptions from this rule for any foreign trips.
One exception is that you spend over 75% of the days away from home working, all transportation is deductible.
The better exception,which is the topic of this post, is called the one week loophole that I would BET that most of you and your friends didn’t know about . In fact, it is a big enough exception to drive a vacation Cadillac through.
If you are in a foreign country doing work and are away from home no more than one week (seven days), you can deduct all of your transportation even if you only work one day! Yes, you read this correctly.
NOTE: The day that you leave for your trip doesn’t count, but the day that you return counts as one of the seven days.
Sandy’s elaboration: This of this a being able to spend up to seven nights in a foreign destination.
Example: You travel to Vancouver Canada to set up a referral network. You spend one day meeting with potential referrals for your business. If you leave on Sunday and come back by next Sunday, you meet this exception. If you are back even one day later, this exception doesn’t apply to you!
Thus, understanding this exception can make your life less taxing.
Material derived from my video series “Tax Strategies For Business Professionals” and my book, “Real Estate Tax Secrets of the Rich.” It is also discussed on videos found on Taxbot if you are subscriber.
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