Is That Deductible? It Depends: "Chicago Roadtrip"

Chicago

I live in rural Indiana, approximately 2 hours away from the vibrant city of Chicago. Chicago has always held a special place in the hearts of my wife and me. We absolutely adore discovering everything that this incredible and picturesque waterfront city has to offer. As I mentioned in last week’s post, our first experience there, while dating, has led to over 20 years of countless return visits to savor all the goodness this city has to offer.

It serves as our hub for international flights and travel, as well as being home to multiple entertainment venues, including my beloved Chicago Cubs and Chicago Bears..

Business to Manage

My wife and I have a passion for traveling, and we particularly enjoy business trips like CME that not only allow us to explore unique destinations around the world but also classify as a business expense. I am especially fond of the Canadian company CME Away because they offer complimentary travel for spouses and have an abundance of incredible locations to choose from. One of my favorite benefits of being self-employed through my professional micro-corporation is the freedom to attend legitimate Continuing Medical Education (CME) events anywhere I choose, regardless of the cost. That is because I can then expense it to my business.

As an employed doctor, you're likely aware of the numerous restrictions placed by your employer on travel for continuing medical education (CME). Additionally, there are often caps of $5000 or less for reimbursed CME costs. From a tax perspective, any amount exceeding this threshold will be deducted from your household funds. As a high-income individual taxpayer, it is challenging to find any viable deductions for this expense.

Thus, Continuing Medical Education (CME) in general is much more cost-effective when pursued through a micro-corporation. It is particularly appealing through CME Away because of its fantastic locations and inclusive fee schedule for spouses.

We have exciting trips planned with CME Away! In November, we'll be going on an African Safari, and in January, we'll embark on a thrilling New Zealand Tour.

Those trips are the reason we had to visit the US Customhouse in Chicago.

Global Entry Enrollment

We have exciting business travel plans ahead of us, including two international trips. There is also a lot of anticipated business travel for SimpliMD and planned locums work for next year. On top of that, we have plans to engage in international mission work and embark on numerous pleasure trips over the next decade. As part of our travel goals, we aim to systematically visit every US National Park. For instance, we will be stopping over in Samoa in February on our return flight from our New Zealand CME. This is all interconnected to my decision of giving up obstetrics and hospital work recently, while planning for the to coast to fatFIRE in July of 2024.

With all this travel, it just makes sense to save time and airport hassle by enrolling in the US Customs and Border’s Global Entry program. The great feature is that it replaces our TSA pre-check for both domestic and international travel, streamlining the entire process. I absolutely adore those shorter lines at the airport!

It’s a Process

Well, the adventure truly began four months ago when we both enrolled in the Global Entry program, paying $100 each. To give some context, my wife is employed by my professional micro-corporation, serving as the bookkeeper and office manager. She is not only a co-owner but also an employee responsible for bookkeeping in our associated business development corporation. This corporation serves as the hub for our nine micro-businesses, which we jointly own. She doesn't always have a business purpose for traveling with me, but most of the time she does. Thus, her business purpose for having a Global Entry membership along with me is pretty straightforward.

One of the steps associated with the Global Entry program is a face-to-face interview at an approved location, typically in large cities, throughout the country. However, due to the program's popularity, scheduling an appointment can take several months. With that in mind, they also offer a walk-in offer for citizens returning from international trips. Therefore, we planned to take advantage of this when we re-entered from our trip to Iceland, Ireland, and England in June of this year. As fate would have it, we meandered through the massive labyrinth of O'Hare airport only to find this small office closed by the time we arrived, 15 minutes late. What a bummer! So, we had to go to plan B, which was scheduling an appointment 2 months later at the Chicago field office. Even though it's a 2-hour drive each way, I thought we could turn this business trip into an adventurous date in one of our favorite cities.

Let The Adventure Begin

I was excited because we hadn't had much time in downtown Chicago since COVID-19. However, my wife informed me that she had no interest in strolling through downtown after our appointment. Surprised, I asked her why, and she responded, "Don't you watch the news?" The truth is, I don't really watch much news, but she is right about the risks for being a victim of violent crime while on the Magnificant Mile has dramatically increased.

With that valuable piece of information, coupled with my unwavering trust in my wife's wise intuition, we made adjustments to the plans to make them less ambitious, yet still ensuring a enjoyable business trip.

We hopped into my recently acquired Range Rover around 8am to embark on its maiden voyage to downtown Chicago. The most direct route involves utilizing a toll road. I'm not sure if any of you have ever used a toll road transponder on your Range Rover, but there is a special place on your windshield where it should be located. I dutifully placed mine there. Going through the toll plaza and getting that automatic green light, with the gate arm flying up, feels great. However, it can be disappointing when it doesn't happen.Then add in 10 other angry Chicago drivers stacked up behind you, wondering why the country hick can't figure things out. Meanwhile, I nervously pressed the "help button" on the wall. After what felt like an eternity of waiting with no response, I finally decided to swipe my credit card to get the gate to open it. However, the transponder only seemed to work at about half of the toll booths. It felt like playing a game of Russian roulette all day long.

The good news is that the GPS was spot on! We found a nice curbside parking spot at the Customhouse in the city. We were warmly welcomed by the customs agent, and in less than 15 minutes, we successfully completed our "interview" and finished the job. We will receive our official Known Traveller Global Entry cards in two weeks.

The Podcast

II had also scheduled a podcast interview with KevinMD the Podcast during lunchtime on the same day of my business trip. There's nothing quite like maximizing productivity during a business trip!

Dr. Kevin Pho and I were discussing my blog post, which was published on his influential blog site on July 5th. The post is titled: “It’s time for every doctor to start a professional micro-corporation”.

As you already know, I am incredibly passionate about this subject!

I figured I could find a quiet place with free WiFi nearby, and the "Old Post Office" fit the bill perfectly. I'll let you know when the podcast goes live in a few weeks.

Let’s Eat

Knowing my wife's concern about being in downtown Chicago, I made the decision to take us to a smaller, safe, and charming downtown area in Valparaiso, Indiana for our meal. It's conveniently located about an hour away from downtown and is right along our route back home.

We decided to dine at a restaurant where I had a partial gift card. I had received this gift card as an honorarium for preaching three services at my local church. Although the gift card didn't cover the entire cost of the meal, it was still satisfying to make use of it. I'm not sure how any of you manage gift cards, but I find it quite difficult to use them, and they end up accumulating on my desk. However, there's a great feeling of satisfaction when I finally clear one out.

Rest & Connection

After enjoying a delicious post-meal dessert at a local ice cream shop, we made our way to the downtown city park to rest and relax. We dedicated some time to discussing questions and thoughts from a marriage book we are currently reading called "Cherished." Afterward, we indulged in the simple pleasure of reading and observing people in the park. IIt was one of those great days in Northern Indiana, with the sun shining and temperatures in the 70s. I had the pleasure of spending time alone with my favorite person in the world! We had wonderful discussions all day long, covering various professional and business-related matters. It's fascinating to see how our personal and business lives are tightly intertwined.

Is That Deductible? It Depends

So now is the fun part of figuring out what portion of the trip was business deductible.

Cost for Global Entry Program:

• All expenses related to this program are covered by the business

Travel & Transportation: The mileage on the Range Rover owned by my Professional Corporation, as well as toll expenses, parking, and gas.

• All are business related and covered

Meals: My wife and I are simple and frugal individuals. We're the kind of people who bring our own coffee from home in our travel mugs and try to save money by eating out only once a day. We even consider using up a gift card to make the most of our budget! I understand that some of you may have chosen a different approach when it comes to food on a business trip, but this is just how we do things.

• Tax laws change every year, and business meals seem to be one of those items that get kicked around a lot. In 2023 meals are 50% deductible for business meals with clients, meals while traveling for work, food items for the office, meals at a conference. Meals are 100% deductible for dinner for employees working late at the office, food for company holiday parties, food and beverages given to the public, treating 50% or more of your employees to a meal (a 50%  deduction applies if treating less than half of all employees). I highly encourage you to consult with a tax professional who can provide expert advice, effectively manage the process, and ensure proper documentation of all these matters.

• Based on the fact that my micro-corporation's only two employees (my wife and I) had a meal together, which falls under the last 100% deductible category, therefore, we can score it as a business expense!

Internet Access: In order to do the podcast interview with KevinMD, I needed my business computer, as well as the headphones and microphone provided by my company. Being frugal, we once again found a quiet and free public location to conduct the interview. There were no costs, which is always a plus for me as I love anything that's free! However, if I had needed to purchase internet access for this legitimate business activity, it would have been considered a business expense.

Unfortunately, if you are a traditional employee, most of these expenses would have come out of your own personal budget. Admittedly, they may not seem like much individually, but week after week, throughout the entire year, the deductions can add up significantly. I invite you to check into the journey to micro-business competency through the multiple resources available at SimpliMD. Your micro-corporation can be used for both your primary job and your side jobs.

I encourage you to not hesitate and let SimpliMD create your personalized micro-corporation and begin saving tax dollars! You can download my free e-book “Why Every Employed Physician Should Form Their Own Corporation” here.

Your best first step is to become a SimpliMD member and unlock the $2500 in resources, then take the next step to engage with SimpliMD to create your personalized micro-corporation through our concierge level legal services.

Don’t wait til you are burned out as employee, take the step to be set free now!

Tod