In this edition of “is that deductible”, we’ll cover one of my favorite subjects-combining my pleasure of travel with my love for learning through international CME.
When structured properly for a business purpose like CME, a good portion of your international business travel can be a deductible business expense
I don't know many doctors who don't like to travel, especially on international trips that expose you to the amazing sights and sounds outside of the US.
You will often pursue international continuing medical education to stay updated with the latest advancements in your field by rubbing shoulders with doctors who are from outside the US. I have thoroughly enjoyed learning from my international peers as we do CME together—in the long run it makes a me a better doctor to understand a non-US based interpretation of medicine.
In fact, while you read this—I am at a CME in Kenya with CME Away!
If you are employed, the unfortunate reality is that the majority of employers do not provide support for international Continuing Medical Education (CME). This was my personal experience before I became an independent contractor. It felt good to break away from employer restrictions such as limited international travel, small CME stipends of under $3000 (resulting in shoulder extra expenses personally), and strict limits of 5 business days for CME activities.
In contrast, if you are self-employed as a micro-corporation this opens up your power to do your CME wherever you like, for whatever cost your company can afford, and for as long as you need—with the majority being funded by your micro-business.
While international CME is an excellent way to enhance your skills and knowledge, it's essential to understand the tax implications of these international endeavors.
In this blog post, I’ll explore the tax considerations you should be aware of when engaging in international continuing medical education. Please remember as you read this post that I am not a tax professional, nor am I offering business tax advise to you. But I do think there are some general concepts that will be beneficial for your consideration.
Understanding the Basics
Before delving into the specifics, it's important to grasp some fundamental concepts:
Continuing Medical Education (CME): These are educational activities that healthcare professionals participate in to maintain and enhance their skills and knowledge.
Tax Home: Your tax home is your regular place of employment or business, and it's a starting point for determining the deductibility of your expenses.
Deductibility of CME Expenses
The deductibility of your international CME expenses depends on several factors:
Business Purpose: To qualify for deductions, your CME trip must be primarily for professional development. Any personal elements are generally not deductible.
Duration: If your trip is primarily for CME and of a reasonable length, your expenses are more likely to be deductible. This is why a use a trustworthy company like CME Away by SeaCourses due to their long standing track record for organizing these trips—with an eye for inclusively covering their program as a business expense (including spouses attending for free!)
Documentation: Keep detailed records of your CME expenses, including receipts, travel itineraries, and proof of the educational nature of the event.
Tax Considerations for International CME
Educational Expenses: Generally, expenses directly related to your education, such as registration fees, course materials, and travel to and from the event, may be deductible.
80% Rule: This rule allows businesses to deduct expenses related to travel, meals, and accommodations that are directly tied to conducting business while abroad. The 80% rule states that at least 80% of the time spent during the trip must be dedicated to business activities in order for these expenses to be eligible for deduction. This means that only 20% of the time can be allocated for personal activities or leisure.
Reporting: Ensure that you accurately report all deductible CME expenses on your tax return.
Keeping thorough records of your international CME expenses is crucial. This includes:
Detailed receipts for registration fees, travel, and other expenses.
Documentation proving the educational nature of the event.
Tips for Effective Tax Management
Plan Ahead: Consult with a tax advisor before your international CME to understand the tax implications and plan accordingly.
Choose The Right Vendor: I recommend you use an experienced CME agency who works exclusively with physicians to provide CME events that comply with the US business and tax code-including the provision of qualified US CME credit.
Keep Impeccable Records: Accurate record-keeping is essential for ensuring that you claim the deductions you're eligible for.
Seek Professional Advice: If you have questions or concerns about tax matters related to international CME, consider consulting a tax advisor with expertise in this area.
International continuing medical education is a valuable opportunity for doctors to stay current in their field. However, it's important to be aware of the tax considerations associated with these educational pursuits. By understanding the basics, keeping thorough records, and seeking professional guidance when needed, doctors can ensure that their international CME experiences are both enriching and tax-efficient.
In the end, by following the principles covered above, you will be able to enjoy international travel with your spouse as a deductible business expense through attendance at international CME.
If you are interested in learning how you can start your own micro-corporation and take advantage of international CME, reach out to me here.
I also invite you to take the step of becoming a SimpliMD member and joining our community of doctors who are thriving as micro-corporations and using their business to enjoy international travel.