{"id":115,"date":"2024-07-17T22:41:57","date_gmt":"2024-07-17T22:41:57","guid":{"rendered":"https:\/\/www.bourbonnaistax.com\/blog\/?p=115"},"modified":"2024-07-17T22:41:57","modified_gmt":"2024-07-17T22:41:57","slug":"what-i-did-on-summer-vacation","status":"publish","type":"post","link":"https:\/\/www.bourbonnaistax.com\/blog\/what-i-did-on-summer-vacation\/","title":{"rendered":"What I Did on Summer Vacation"},"content":{"rendered":"
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\u201cFederal Income Taxation\u201d is the<\/em> foundational tax class in any accounting or law school program. Contrary to what you may think, it doesn\u2019t involve diving into thickets of dense, impenetrable tax forms or long, intimidating columns of numbers. The final exam doesn\u2019t challenge students to fill out a 1040. Instead, the class focuses on introducing students to basic concepts that apply throughout the tax world. What, exactly, is \u201cincome\u201d? When is it \u201crealized\u201d or \u201crecognized\u201d? What are \u201cdeductions,\u201d and when are taxpayers entitled to them? What are \u201cdepreciation\u201d and \u201camortization\u201d? What\u2019s the best remedy for serious<\/em> tax headaches, and why is it alcohol?<\/p>\n\n\n\n

Over the last month, we\u2019ve discussed several videos circulating on social media purporting to help you save money on taxes. Today, we\u2019re going to see how one would-be influencer mishandles the basic concept of \u201csubstance over form.\u201d<\/p>\n\n\n\n

Summer is here, and that means vacation travel. Unfortunately, vacations are pricey. Wouldn\u2019t it be great if you could get a deduction for those beach nirvana expenses? Never fear, Anna from Instagram is here to show you the way: \u201cHere\u2019s how you\u2019re actually gonna be able to write off travel with any of your family members!\u201d<\/p>\n\n\n\n

The answer, it turns out, is to put them on your company\u2019s board of directors. \u201cThat way,\u201d she says, \u201cwhen you travel, and you want to make that a business deduction, because you\u2019re talking about quarter one goals or you\u2019re having a retreat to mastermind on the what the future of the business is, guess what? Your husband is on there, so now his plane tickets, the entire hotel, the meals can be written off for everybody.\u201d<\/p>\n\n\n\n

But what if you get tired of your husband\u2019s business advice? What if he watches Anna\u2019s video and says, \u201cIt can\u2019t possibly be that easy\u201d? No problem, says Anna: \u201cYou can also remove people if they make you mad!\u201d<\/p>\n\n\n\n

Here\u2019s the problem. The IRS has very\u00a0specific rules<\/a>\u00a0governing how much of your travel expenses you can deduct, depending on whether you\u2019re truly traveling to make money or just casually discussing business on the beach. If you\u2019re traveling inside the US, you have to spend more than 50% of your trip on business to deduct 100% of your transportation costs. If that number drops below 50%, your deduction drops to zero. Lodging and meals are deductible for business days but not personal days. And as for spouses and other dependents, there\u2019s no deduction at all unless their presence has a bona fide business purpose.<\/p>\n\n\n\n

Tax Court archives are full of cases where taxpayers lost deductions for bogus \u201cbusiness\u201d travel. They didn\u2019t keep adequate records. They didn\u2019t show a profit motive for the trip. Or the scattered business discussions were merely \u201cincidental\u201d to the real purpose of the trip, which was fun and games.<\/p>\n\n\n\n

Beyond the specific travel rules, deducting your husband\u2019s travel because you\u2019ve made him a \u201cdirector\u201d triggers a basic question involving \u201csubstance over form.\u201d The IRS doesn\u2019t just look at the legal form<\/em> of a transaction. They look for actual substance<\/em>. Throwing your husband on your board may look good on paper. But, serving on a board is an important legal commitment with specific responsibilities and liabilities. And if you kick your husband off <\/em>your board just because he \u201cmakes you mad,\u201d you can actually lose the legal protection you formed your corporation to secure in the first place!<\/p>\n\n\n\n

I sat through (and taught!) the \u201cFederal Income Taxation\u201d class so you wouldn\u2019t have to. Take advantage of it! If you\u2019re traveling for business this summer and you want to take your spouse, call us. Some legitimate tax planning may well save you enough to pay for the trip without playing \u201cboard of director\u201d shell games!<\/p>\n\n\n\n

https:\/\/bit.ly\/BeatTheIRSLegally<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Over the last month, we\u2019ve discussed several videos circulating on social media purporting to help you save money on taxes. Today, we\u2019re going to see how one would-be influencer mishandles the basic concept of \u201csubstance over form.\u201d<\/p>\n

Summer is here, and that means vacation travel. Unfortunately, vacations are pricey. Wouldn\u2019t it be great if you could get a deduction for those beach nirvana expenses? Never fear, Anna from Instagram is here to show you the way: \u201cHere\u2019s how you\u2019re actually gonna be able to write off travel with any of your family members!\u201d<\/p>\n","protected":false},"author":2,"featured_media":117,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_genesis_hide_title":false,"_genesis_hide_breadcrumbs":false,"_genesis_hide_singular_image":false,"_genesis_hide_footer_widgets":false,"_genesis_custom_body_class":"","_genesis_custom_post_class":"","_genesis_layout":"","footnotes":""},"categories":[3],"tags":[49,50,4,10,11,9,51,6,48,46],"class_list":{"0":"post-115","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-taxes","8":"tag-instagram","9":"tag-irs","10":"tag-tax","11":"tag-tax-reduction","12":"tag-tax-savings","13":"tag-tax-strategy","14":"tag-taxdeduction","15":"tag-taxes","16":"tag-vacation","17":"tag-writeoff","18":"entry"},"_links":{"self":[{"href":"https:\/\/www.bourbonnaistax.com\/blog\/wp-json\/wp\/v2\/posts\/115","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.bourbonnaistax.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.bourbonnaistax.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.bourbonnaistax.com\/blog\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.bourbonnaistax.com\/blog\/wp-json\/wp\/v2\/comments?post=115"}],"version-history":[{"count":2,"href":"https:\/\/www.bourbonnaistax.com\/blog\/wp-json\/wp\/v2\/posts\/115\/revisions"}],"predecessor-version":[{"id":119,"href":"https:\/\/www.bourbonnaistax.com\/blog\/wp-json\/wp\/v2\/posts\/115\/revisions\/119"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.bourbonnaistax.com\/blog\/wp-json\/wp\/v2\/media\/117"}],"wp:attachment":[{"href":"https:\/\/www.bourbonnaistax.com\/blog\/wp-json\/wp\/v2\/media?parent=115"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.bourbonnaistax.com\/blog\/wp-json\/wp\/v2\/categories?post=115"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.bourbonnaistax.com\/blog\/wp-json\/wp\/v2\/tags?post=115"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}