The competition is fierce out there in the world of digital marketing and direct-to-consumer marketing. Any business trying to beat the competition knows this, and this is particularly true for marketers, who are really good at getting in front of the right people at the right time.
While there are many ways to get an edge, one of the best ways is to stay on top of the latest trends and technology. Continued education and work training is a must these days, especially as technology moves at the speed of light. But did you know that by investing in yourself and business with continued education can help you qualify for some much needed tax write offs while improving your team?
These are the kinds of write offs our clients love. We have clients that make a trip out of going to conferences in fun cities, where you can also deduct your travel. One CEO of one of the biggest LA-based marketing companies once shared with our team that he will speak at any conference where there’s snow.
Because he loves snowboarding and can deduct the flight, meals, and lodging for what is primarily considered a continued education trip, and is therefore 100% deductible. And yes, it’s completely legal. Big companies do it, and so should you.
The Tax Write Off Perks of Career Advancement
Tax write offs or tax deductions help lower your taxable income, thereby lowering your tax bill. Throughout the year, your business incurs regular and necessary business expenses that can help lower your tax obligation.
And expenses associated with advancing your career or that of your employees can qualify as a tax write off. Keep in mind, this must be work related training and it must be relevant to your industry or have a clear professional benefit.
What Qualifies As a Tax Write Off
In order to qualify as a tax write off the expense must be related to your industry. It does not apply if the expense isn’t directly related to your business. So what qualifies as a qualified expense? There are a lot of expenses associated with career advancement that can qualify including:
- Attending a conference or symposium
- Tuition for courses that allow you to develop your career, which includes learning new technology, procedures, and industry specific regulations.
- Expenses associated with continued education like books, laboratory fees, copy fees, and supplies.
- Travel expenses, as long as it is from class to home and for less than a year. Keep track of mileage, car rental fees, tolls, meal expenses, airfare, and lodging.
This means that if you want to attend a course on communication, time management, or best sales practices to help you increase sales, you could deduct these expenses. If you are a digital marketer and want to attend The Digital Summit in Los Angeles, the cost of attending the conference and your travel costs can qualify as a deductible expense. This applies for your clients too. And is often a good reason to add a golf, surfing, or ski company — you can go to their conferences but be sure to stay productive! This way, you get to mix a little business with pleasure, and take advantage of the tax perks!
To be comfortable taking these deductions, you must have good accounting process in place. This is why large corporations invest so much in travel logging software. They reimburse their employees, sure but if they can’t substantiate in an audit that it is a business trip, they lose the deduction. We like to recommend Quickbooks or Xero with some kind of ancillary trip logging software such as Concur or Expensify. Both are extremely capable and allow you to access your information while on the go, making expense tracking easy.
How To Claim Business Improvement & Career Advancement Tax Write Offs
If you are self employed you need to file a Schedule C to claim these tax write offs. In order to qualify the expense must be necessary to advance your career or that of your employees. If you have an S-Corporation, C-Corporation, or Partnership then you deduct these within your business’ tax form. It cannot be simply to meet a minimum requirement. One famous example is that of real estate agents. If you are studying to obtain your real estate license, you cannot deduct the costs associated with getting your license including application fees, study materials, or any course work. However, once a real estate agent obtains their license, any classes that are taken for continued education qualify. The point here is to make sure you’re going to a conference or taking a class that is value-add.
Tax write offs and deductions are a great way to lower your taxable income. Continued education for career advancement can not only help you earn more income, but can help you lower your tax bill, so it’s a win, win! Planning for deductions is part of a good tax planning strategy. Talk to your tax advisor about the benefits of furthering your career for tax incentives. To learn more about tax write offs talk to one of the tax experts at the Tax Hack Accounting Group or subscribe to our newsletter.