Can I Use My Vacation as a Business Expense?
Mixing business and vacation can be an exciting and rewarding experience, allowing you to combine the exploration of new geographies, cultures, and cuisines with the opportunity to learn and grow your business. With so many opportunities available, it’s possible to combine your love of travel with your business objectives, expanding your horizons and enhancing your entrepreneurial skills.
By incorporating business into your vacation, you can gain valuable insights into global markets, learn from successful entrepreneurs from around the world, and broaden your perspective on business and life. Whether you attend conferences and seminars in your field, visit trade shows, or connect with local business leaders, there are endless opportunities to gain knowledge and fortitude that can help grow your business.
Moreover, travelling can be a great way to rejuvenate and re-energize, and taking time off from work can help you come back to your business with a fresh perspective and renewed motivation. The change of scenery can help you escape from the routine of your daily life and allow you to think creatively about your business strategies.
With the advent of technology, it’s now easier than ever to stay connected to your business even while you’re on vacation. With tools such as cloud-based software and video conferencing, you can stay on top of important tasks and meetings while still enjoying your time away.
There are items to keep track of while vacationing and working simultaneously. They include the costs of transportation, accommodations, meals and activities. Ensure you maintain all receipts of the costs of the trip and where possible and make and maintain notes to support the expense to the business.
It is also a great idea to keep a log of communications whether by email or telephone to support your position of working while vacationing and the dates and times of these interactions. In email, you can segment the work emails during holidays to substantiate your claim..
All of these items together makes for a more seamless interaction with Revenue Canada if ever they dispute your expenses.
Be reasonable with the expectations you have to expense your holiday. The travel and expenses should only be a small fraction of the businesses overall revenues and should be a viable expense to the business overall.
Let’s discuss different examples that may be relatable to your specific situation
Using your Business Laptop On Holiday
This is the most common business expense for business owners when you take your laptop away while on vacation. Your work laptop is only secondary to the importance of your passport and credit cards. Why do you take a laptop on holidays? It’s not just a matter of being able to connect with employees and clients while you’re away, it’s about taking control of your business and ensuring that it continues to thrive even when you’re not physically there.
When you own a business, it’s not always easy to take time off. There are always emails to answer, projects to oversee, and employees to manage. But with a laptop and an internet connection, you can take your business with you wherever you go.
With the ability to work remotely, you can enjoy the best of both worlds – a relaxing vacation and the peace of mind that comes with knowing your business is still operating smoothly. By taking some time each day to check in, respond to emails, and manage your team, you can ensure that your business continues to run smoothly even while you’re away.
Moreover, this allows you to be more present with your family and loved ones during your vacation, without the added stress of worrying about your business. By taking your laptop with you, you can set boundaries around when and how you work, allowing you to fully enjoy your time off while still keeping an eye on your business.
Using an example of taking your laptop with you on vacation and spending an hour per work day involved in reaching out specifically for business items on your vacation as an example, you may be able to take between 10% and 12% of your vacation expense and allocate that as a business expense.
Attending Conference or Trade Show in your Industry
Lots of larger organizations attend different conferences and events within their industry. Many smaller business owners don’t know about the events and are not aware of the significance of attending.
If you attend a conference or event specific to your industry, more of the related expenses for registration fees, travel, accommodations and meals may be available as a tax expense up to 100% of the expenses. If you travel in or fly in and leave specifically for the days the conference is on, the entire trip can be expensed.
There are many reasons why taking time away from your business to attend a conference is a great idea. The benefits include:
- Networking: Conferences provide an excellent opportunity to network with other professionals in your industry, which can lead to new business opportunities, partnerships, and collaborations.
- Learning: Conferences often feature workshops, keynote speakers, and educational sessions that provide valuable insights into new trends, technologies, and best practices in your industry. This can help you stay current with the latest developments and improve your skills and knowledge.
- Brand exposure: Attending a conference can help increase your brand exposure and visibility within your industry. This can be especially valuable if you are a new business or trying to expand your reach.
- Inspiration: Conferences can be a great source of inspiration and motivation. Hearing from successful business leaders and entrepreneurs can help you stay motivated and focused on achieving your business goals.
- Access to resources: Conferences often feature exhibits and vendors that offer products and services that can help you grow and improve your business. This can include everything from software and technology to marketing and consulting services.
Attending a conference overall can be an invaluable investment in your business providing you with the opportunities to learn, network and grow your business.
Here are a few convention listings from those in Canada and the US to specific higher traffic cities such as Las Vegas and Florida where conventions run year around.
Las Vegas Conventions
Attending an event featuring the very best Entrepreneur Leaders
Often the very best entrepreneurs and business leaders will go out to major cities across North America to speak to how they became successful. If you take a short amount of time away from your business to attend, you can take up to 100% of the expenses to attend as a business expense. If you decide to incorporate a holiday into this time and add on another few days, you can deduct whatever portion where you are attending the event from the overall holiday.
Attending you can learn so many incredible benefits to you and your business can be an invaluable investment giving you knowledge, inspiration and connections you need to grow and succeed including::
- Learning from the best: These entrepreneurs have achieved a high level of success in their businesses, and they can provide valuable insights into what has worked for them. By attending their events, you can learn from their experiences, strategies, and techniques, and apply them to your own business.
- Networking: These events often attract other business owners, investors, and professionals in your industry, providing you with the opportunity to network and form valuable connections. You may be able to find new clients, partners, mentors, or collaborators who can help you grow your business.
- Inspiration: Hearing from successful entrepreneurs can be incredibly inspiring and motivating. It can help you stay focused on your goals, overcome obstacles, and stay committed to your vision.
- Exposure to new ideas: By attending events featuring successful entrepreneurs, you may be exposed to new ideas, technologies, and trends that you may not have otherwise encountered. This can help you stay innovative and competitive in your industry.
- Access to resources: These events may also provide access to resources such as training programs, coaching services, software, and other tools that can help you improve your business operations and achieve your goals.
Some of the top Canadian entrepreneurs who you may want to follow on social media and you might want to attend if and when they do any public touring include:
- Michael Serbinis – Founder and CEO of League Inc., a Canadian health technology company focused on connecting employees with healthcare providers and insurance plans.
- Heather Reisman – founder and CEO of Indigo Books & Music
- Tobi Lutke – Founder and CEO of Shopify, a Canadian e-commerce company that provides a platform for businesses to sell their products online.
- Arlene Dickinson – Canadian entrepreneur, author, and television personality known for her role as a judge on the TV show “Dragons’ Den.”
- Jim Balsillie – Former co-CEO of Research in Motion (now BlackBerry), a Canadian multinational company that produces smartphones and other mobile devices.
- Karen Flavelle – founder and CEO of Purdys Chocolatier
- Nadir Mohamed – Former CEO of Rogers Communications, a Canadian telecommunications company that provides wireless and cable services.
- Linda Hasenfratz – CEO of Linamar Corporation
- Annette Verschuren – Canadian businesswoman and former president of Home Depot Canada, who is now the CEO of NRStor Inc., an energy storage company
To our neighbours to the south, there are a huge pool of top entrepreneurs to follow and seek out for any speaking engagements. They include:
- Richard Branson – Founder of Virgin Group, an international conglomerate that includes over 400 companies, and organiser of the annual Virgin Disruptors conference.
- Tony Robbins – Entrepreneur, author, and motivational speaker who hosts business events such as Business Mastery and the Tony Robbins Global Business Summit.
- Sara Blakely – founder of Spanx
- Tim Ferriss – Author and entrepreneur who hosts the annual Tim Ferriss Summit, a gathering of entrepreneurs, investors, and thinkers.
- Whitney Wolfe Herd – founder and CEO of Bumble
- Gary Vaynerchuk – Entrepreneur and social media personality who hosts the annual 4Ds (Digital Deep Dive Day) event for business owners.
- Warren Buffett – Billionaire investor and CEO of Berkshire Hathaway, who hosts the annual Berkshire Hathaway shareholder meeting.
- Elon Musk – Founder and CEO of SpaceX, Tesla, and other companies, who has spoken at events such as the World Government Summit and the Code Conference.
- Reshma Saujani – founder of Girls Who Code
- Jeff Bezos – Founder and former CEO of Amazon, who has spoken at events such as the Wired25 Summit and the Economic Club of Washington.
If you get the opportunity to see any influential entrepreneur who is making his or her mark on the world, take the time to invest in a podcast, tik tok, YouTube or the best experience of all is to see any of these people and many more in person to levitate your thoughts and your business to a higher ground.
Now bringing your feet back to planet earth in your existing office or work space, all of this is available by following the tax rules set out by the Canada Revenue Agency when it comes to travel and the ability to expense 10% or more as a business expense.
For registered businesses, the applicable section of the CRA tax form for deducting business expenses related to travel and conventions is generally Part 3 of Form T2125 (Statement of Business or Professional Activities). This form is used to report income and expenses for a sole proprietorship or partnership, and it includes specific lines for deducting expenses related to travel, meals, and entertainment.
For incorporated businesses, the applicable section of the CRA tax form for deducting business expenses related to travel and conventions is generally Form T2 (Corporate Income Tax Return). This form is used to report income and expenses for a corporation, and it includes specific lines for deducting expenses related to travel, meals, and entertainment.
Ontario Business Central has been a trusted partner to hundreds of thousands of entrepreneurs across Canada who have taken the leap of faith to start and grow their businesses. As a company that values innovation, risk-taking and entrepreneurship, we are passionate about providing support to business owners every step of the way.
Our goal is to empower entrepreneurs with the knowledge and tools necessary to achieve success. In keeping with this mission, we have prepared an informative article to help entrepreneurs maximize their tax benefits while working and travelling.
As entrepreneurs, we understand that the opportunity to travel can be a valuable tool to broaden your business knowledge and expand your network. However, the financial implications of travelling for business can be complex. That’s why our article provides practical advice and guidance to help you make the most of your business travel, including how to properly track your expenses and maximize your tax deductions.
When it comes to business travel and expenses, it’s always important to seek the guidance of a professional, such as a CPA (Certified Public Accountant), to ensure that you are adhering to the rules and regulations set forth by the government.
CPAs are experts in tax laws and regulations, and they can provide invaluable advice on the acceptable level of expensing when travelling for business purposes. They can help you understand what expenses are deductible and what documentation is required to support those expenses.
Should you have any questions, please feel free to reach out to our staff for additional information and assistance.
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Ontario Business Central Inc. is not a law firm and cannot provide a legal opinion or advice. This information is to assist you in understanding the requirements of registration within the chosen jurisdiction. It is always recommended, when you have legal or accounting questions that you speak to a qualified professional.