Transcription
Yo, what's good family? We're back again with another episode of Tax Free Living, where I teach entrepreneurs just like you how to live tax free. I'm your host, Carter Coffield, and we have an amazing episode today, y'all. This is one of my favorite things to talk about, and the title for today's episode is "How to Write Off Your Vacations." Yes, how to write off your vacation. So, buckle your seatbelts, it's going to be a crazy episode. I'm gonna get some crazy game today.
And before we get into today's episode, guys, hit that like button, hit that subscribe button, subscribe to the channel, right? I want you to have alerts and updates when new videos come live. We're coming every Tuesday with a new tax-saving strategy. So, hit that like button, hit that subscribe button, and without further ado, let's get into today's episode.
So, if you're anything like me, right? You love to travel. One of the reasons I became an entrepreneur is so I can have financial freedom. But a bigger reason why I became an entrepreneur is because I didn't just want financial freedom, right? I wanted location freedom. I wanted to be able to work wherever I want to go, travel wherever I want to go, and not have a limit on where I have to live or where I have to be, right? That's freedom. So, the only thing better than traveling or vacationing is being able to write the trip off on your taxes.
But before we get into the, the how and the details, we need to start changing the question that we're asking. Because most of the time, when people approach me or reach out with questions, they say, "Hey Carter, is this tax deductible? Right? Is this expense tax deductible?" And I think we need to change that question, right? The question is not, "Is something tax deductible?" The question we should be asking is, "How can I make it tax deductible?" Right? Because one of my favorite quotes is that if you want to pay less tax, simply change the facts. When it comes to tax deductions, we need to be creative and think, "How can we make something tax deductible?" Almost anything could be, could be a tax deductible expense. We just gotta be creative and think about the how.
So, this strategy is called "Wrapping the Weekend." Okay? Wrapping the Weekend. So, let me give you a scenario. My boys hit me up like, "Hey Carter, we're going to Miami for the weekend. It's my birthday, we gonna turn up, it's gonna be lit. You know, we need some time off. Let's go have a vacation out there. You know, we're leaving this Friday, heading to Miami, and then we're gonna come back on Sunday." Is that trip a personal trip or a business trip? That is a 100% personal trip. That's a 100% personal vacation. We can't write that off.
But if we simply change the facts, we can change this personal vacation into a legit tax-deductible business, business trip. So, it's a few steps in order to make this change, okay? So, follow me closely. Again, take notes. Let's get into it.
Number one, we need to make sure that we are traveling on business days. We need to make sure we're traveling on business days. So, instead of leaving on Friday and coming back on Sunday, I'm instead going to leave out on Friday and come back on Monday. And I'm gonna tell you why in a moment.
Step number two, right? We want to find business activity in the location that we're traveling to. And most people think this part is hard for some reason. Most people like, "Yo, like I don't know how to find business activity in the place that I'm going." So, let me give you all four easy ways to find business activity anywhere in the world. Alright?
So, one of the ways you can find business activity is by meeting a business partner for lunch, right? If you have a business partner, entrepreneur friend, a mentor, right, a mentee, you can take them out to lunch, and that is considered a business lunch. So, you technically have to go to Miami to have this business lunch with this person, and that counts as business activity.
Number two, another way you can do it is to take a client out to dinner. If you own a firm or you're in real estate or whatever the case may be, and you have clients in that state, you can take your client out to dinner, and again, that counts as business activity for that day.
Now, if you don't know any customers or you don't have any business partners in that state or location, don't worry, I got you, okay? The third way is to attend a workshop or a conference in that area. Have you ever wondered why most conferences are in Las Vegas, Miami, New York? If you think about it, a lot of the major conferences are in those places. Now, why do you think conferences are held at these big cities, in these often-traveled cities, right? Because the conference coordinators are not stupid. They understand that business owners are going to these conferences and they're going to write off these trips. So, to entice people to come to the conference, they host them in places that people want to travel to, right? If we attend, that changes that personal trip to a business trip because that counts as business activity. So, the three ways.
But guess what? I got one more for you. Now, this one, like, yeah, this one is the, takes the cake because this, I know for a fact that you'll be able to take advantage of. You can go to a networking event in this location, right? A networking event in relation to your industry counts as business activity. So, one of my favorite things to do is to go to either Eventbrite.com, write this down, or go to Meetup.com. These are two websites that have meetups and networking events in various locations every single day. So, again, our Miami example, I'm going to Miami, I can find, I go to Eventbrite, find a networking event in investing or networking event in financial education. I can attend the networking event, build some relationships, and that counts as business activity.
The IRS considers the entire trip to be a business trip. So, now you get to write off 100% of the flights, 100% of the lodging, hotels, Airbnbs, and guess what? You also get to write off 100% of the business meals that you have at that location. And the IRS doesn't care what we do on Saturday and Sunday. We can sip margaritas, mojitos on the beach. The expenses are still tax deductible because the IRS is thinking like, "Hey, well, if they have to be there on Friday and they have to be there on Monday, it makes no sense for them to come home." So, we'll allow them to stay over the weekend and still consider the trip to be a 100% business trip. Isn't the tax code for y'all?
Okay, let's talk about documentation because all this is cool, but we can't write off what we don't track, and we can't write off what we can't prove. So, a few recommendations. So, I recommend keeping a business log, right? Whether it's digital or physical, you want to keep a business log of what, what you did. Also, I recommend keeping any receipts, right? So, if you took somebody out to dinner, out to lunch, documentation is important. Keep the receipts from the things that you did and put them in your business log. In case of not, we don't want to fear an audit. See, we want to be prepared. We want to be prepared for an audit. So, keep the receipts, keep the documentation of all the business activity you did on the trip. If you do so, you're able to write off the entire trip.
Now, this doesn't just go for weekend trips, right? If you're traveling Monday through Friday, if you do business activity each of those days, again, you're able to count that day as a business day and you're able to write that off on your taxes. So, again, when we're taking vacations, we need to pause before we leave. It's all it takes is planning. Ask yourself, "Man, I'm about to go on this trip. How can I make this trip tax deductible?" Right? Buying business activity, plan. Do these things before you travel, and your business can pay for these expenses.
You got any value? Send this video to somebody. Go be a blessing. Go be a conduit of information for somebody else. And let me know in the comments below what other tax strategy do you want me to talk about? I'm always willing to take you all's advice on what you want me to teach. So, I'm super excited just to tap in with y'all and keep this Tax-Free Tuesday going. So, again, like, subscribe, comment below, and I'll see you all next time. Peace.
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