Let's face it, money is tight right now. Even if it wasn't saving money is always good thing.
If you are self-employed, or even an employee whose profession requires continuing education (think for licensure of maintaining liability insurance), you can LEGALLY write off those expenses!
This includes the cost of education that maintains or improves skills required in your current trade or business. Your related travel expenses are also deductible for those trips including 100% of your transportation expenses and 100% of your “on-the-road” expenses including hotel bills, cab fares, rental car, seminar fees, dry cleaning, laundry and meals. Keep in mind that the meal expenses are still subject to the 50% rule. When you bring along your significant other and family, their direct expenses are not deductible.
To demonstrate, I will use the example of a health care practitioner from Green Bay attending the Fall 2013 AMTA-WI Conference at Chula Vista Resort and Waterpark in Wisconsin Dells.
Sue Sample, LMT would like to take her spouse and four children on a family vacation, but can't feel like she can afford it. Her professional membership in the American Massage Therapy Association is due for renewal soon and she needs 14 more hours of continuing education to renew and maintain the liability insurance the association provides. This is a need and she had budgeted for this expense.
If you are self-employed, or even an employee whose profession requires continuing education (think for licensure of maintaining liability insurance), you can LEGALLY write off those expenses!
This includes the cost of education that maintains or improves skills required in your current trade or business. Your related travel expenses are also deductible for those trips including 100% of your transportation expenses and 100% of your “on-the-road” expenses including hotel bills, cab fares, rental car, seminar fees, dry cleaning, laundry and meals. Keep in mind that the meal expenses are still subject to the 50% rule. When you bring along your significant other and family, their direct expenses are not deductible.
To demonstrate, I will use the example of a health care practitioner from Green Bay attending the Fall 2013 AMTA-WI Conference at Chula Vista Resort and Waterpark in Wisconsin Dells.
Sue Sample, LMT would like to take her spouse and four children on a family vacation, but can't feel like she can afford it. Her professional membership in the American Massage Therapy Association is due for renewal soon and she needs 14 more hours of continuing education to renew and maintain the liability insurance the association provides. This is a need and she had budgeted for this expense.
Sue decided that to best benefit her business, she would register for subsidized education through her professional association: The 4 Pillars of Business - Creating your practice from the inside out (Deductible, Cost $50 including her lunch) on Friday August 23 to learn more about, business plans and marketing; attend the AMTA-WI Chapter business meeting to give input on proposed Position Statements and learn about volunteer opportunities on Saturday; and on Sunday attend a hands-on seminar on the Origins of Low Back Pain to improve her skills for injured clients (Deductible, Cost $65 including her lunch.)
Round trip mileage is 280 miles (She deducts $158 using the current IRS Standard Mileage Rate)
Round trip mileage is 280 miles (She deducts $158 using the current IRS Standard Mileage Rate)
Because her trip is almost three hours one way and class starts early, she reserved her hotel room, a Double Queen JR Suite, from Thursday through Saturday Nights by calling 877-663-4602 and referencing Booking for the group. (Deductible, Cost $169/night + $9.95 resort fee/night + tax regardless of number in room up to 4). The room rate included waterpark passes (Regularly $30 each per day without a stay). The hotel charges an additional $20 per night for each guest over 4 in that room, up to 7 max (NOT deductible, Cost $40/night). [Side note - the Queen Tower room group rate is $30 lower per night, but only sleeps up to 5]
To stay on a budget, the family packed a cooler with food, water, soda and snacks, and took advantage of the in-room microwave and snack fridge for their meals. Sue's lunch on Friday and Sunday were included with her class registration, and her family could have joined her for $15 each for both meals. Instead of keeping receipts for the actual cost of her meals and tips which was lower, Sue opted to claim the Meals & Incidental Expenses "Per Diem" rate based on $61/day for that city. She expensed 75% or $45.75 for Thursday travel day, $49 for Friday (taking into account the provided lunch), $61 for Saturday, and $33.73 for Sunday (75% less provided lunch.) Reminder, of this amount, only 50% of the total claim for her meals is deductible for IRS purposes.
The vast majority of expenses were attributable to her legal and ethical business activity and deductible. The family was able to enjoy four days relaxing and playing in the waterpark for only an additional $60+tax for the room and the cost of food for her husband and 4 kids (which they would have eaten regardless of where they were.) Sue stayed on her budget and she and her family were able to afford an end-of-summer retreat!
What are you waiting for? Register for a conference and book your rooms today!
Learn more about business deductions:
Self Employed claim these expenses on Schedule C. More information at in IRS Publication 535, Business Expenses
Employees claim as nonreimbursed employee expenses on IRS Form 2106
The vast majority of expenses were attributable to her legal and ethical business activity and deductible. The family was able to enjoy four days relaxing and playing in the waterpark for only an additional $60+tax for the room and the cost of food for her husband and 4 kids (which they would have eaten regardless of where they were.) Sue stayed on her budget and she and her family were able to afford an end-of-summer retreat!
What are you waiting for? Register for a conference and book your rooms today!
Learn more about business deductions:
Self Employed claim these expenses on Schedule C. More information at in IRS Publication 535, Business Expenses
Employees claim as nonreimbursed employee expenses on IRS Form 2106
Lynn Marie Kutz, LMT is a self-employed Massage Therapist with over 20 years experience, who enjoys incorporating her personal passions into her business making them legally deductible. She reminds you that this blog post is not meant as specific tax advice. Always consult current tax laws at IRS.gov and/or your accountant.