Four Types of Bizcations – Relaxing, Tax-Deductible Business Vacations

If you’re not sure you can afford a traditional vacation, and the idea of a “staycation” (staying close to home or at home) bores you, consider the “bizcation” – a combination of work and leisure that enables you to relax in a pleasant setting while pursuing some legitimate business goals, though not to the extent of stressing yourself.

When you plan your bizcation while keeping in mind the IRS guidelines for what counts as tax-deductible business travel, you may be able to deduct all or nearly all of your transportation, lodging and eating expenses for your trip as business expenses, while enjoying most of your time away from home as leisure.

According to IRS taxpayer publication #463, a crucial rule in what counts as deductible is this: “Count as a business day any day your presence is required at a particular place for a specific business purpose. Count it as a business day even if you spend most of the day on non-business activities.”

Consequently, a valid bizcation plan includes something taking place Monday through Friday that could plausibly happen only at the vacation location. The weekends before and after can often be justifiably tacked on to enable you to recover from jet lag and take advantage of lower air fares or lodging specials.

(Note that you should check with your own tax advisor to be sure your situation conforms to all relevant guidelines for deductible business travel.)

Four Bizcation Plans

The following four concepts illustrate ways to show a convincing business reason for traveling and staying at a wonderful location for a week or two.

1. Attend a conference. Events with educational and/or business networking components should qualify you for tax deductibility. The conference topic doesn’t have to be central to your line of business, just somehow relevant.

However, for the purposes of a bizcation, this option is a bit tricky. Conferences tend to pack as many meetings as possible into a relatively small number of days, such as three or four. You want to be able to attend a few sessions scattered from Monday through Friday without spending a fortune for a conference fee, and you want there to be plenty of time for sightseeing, golf, beach bumming or whatever else relaxes you.

2. Arrange an extended consultation. Many veteran consultants offer special deals for lengthy consultations on their own turf, which might be Chicago, Las Vegas, Phoenix or – in my case every winter – Maui. As with option #1, you want to stretch out the schedule of meetings to as many days as you can, rather than cram the whole consultation into just a day and a half.

My own bizcation schedule for clients meeting with me in Maui is three hours on Monday and one hour a day Tuesday through Friday, as well as an hour before and an hour after their visit to the island. Feel free to suggest this plan to your favorite guru who lives someplace you’d like to hang out.

3. Plan a working retreat. This can be solo or involve your top team members. Either way, a retreat provides an opportunity to engage in strategic planning or sustained project work away from the distractions of the office.

Writers, musicians and creative entrepreneurs have taken and justified solo retreats to the tax authorities for ages. The corporate retreat likewise has a long, respectable history. To fulfill the bizcation idea, just make sure you don’t turn into a taskmaster with respect to yourself or others.

4. Meetings with clients. Finally, can you find a cluster of professional colleagues or folks on your client list in a place you want to visit? If so, plan a series of meetings with them that span the period of your visit. These can be one-on-one meetings or small-group get-togethers.

One American consultant I know who visited Australia as a tourist invited newsletter subscribers to a round-table lunch in Sydney during her visit. From what she wrote about the session afterwards, it was genuinely productive for her in keeping her abreast of business conditions around the world and in building closer relationships with her followers. You might be able to extend and tailor this idea to fit the requirements for a tax-deductible bizcation.

According to 2010 research by Homewood Suites, combining business travel with leisure is increasing in popularity. Of 540 travelers they surveyed who took three or more trips of four days or more a year, two-thirds sometimes or frequently combined a business and leisure trip. That number was up 16 percent from 10 years earlier.

Ready to join the trend?