Most nurse practitioners have had a “CME vacation” using that lovely CME allowance provided by your employer (if you did not negotiate a CME allowance into your compensation you are getting screwed and need to get on that by the way.) You pick an interesting course and an awesome location, pay for everything up front, then submit all your receipts to your employer in hopes they will reimburse you fully for it. A few weeks go by and you get that fat $3,000 check in the mail. You do your happy dance. Such a beautiful thing! It is one of the perks of being a medical provider.
But what if I told you that you could have as many “CME vacations” as you wanted if you owned your own business? Yep, that is right my friends.
You see, when your employer reimburses you for your CME it is a tax-deductible expense for them. They use their tax-free revenue to reimburse you for your CME expense.
You know what the problem is though? That the money you used to pay for that CME vacation was already taxed to begin with if you are a W2 employee. You used taxed money to pay for a CME, then your company reimbursed you for it. So, the $3,000 you used on the CME was more like $4,000-$4,500 if you factor in the taxes you paid before you were issued your paycheck to begin with.
This is another reason that you need to start a side business as soon as possible. We will keep numbers uncomplicated for simplicity purposes here. Let’s say you make $3,000 in your side business one month and decide you want to go to Costa Rica for 5 days. Well if you go for CME that vacation now has turned into a business trip and became a totally tax-deductible expense because you need this knowledge to operate your business, right?
Say the vacation costs $3,000. You can pay for that vacation TAX FREE through your business. You just saved $1,000-$1,500 in taxes because you used pre-tax money from your business. This is 100% legal and represents another tax advantage of having your own business.
This is the main perk of having a side business as a nurse practitioner. This side business provides you many tax incentives that are totally legal. Instead of paying yourself the $3,000 of last month’s revenue to go on vacation, which after taxes would be more like $2,000, you have a vacation that also entails some business with it. Therefore, you use the tax free $3,000 of business revenue to go on a business trip. This is how you reward yourself for being a hard working business owner in our great country.
We must have a certain amount of CME hours every year to maintain licensure. It is a VITAL portion of our livelihood. Luckily for us a lot of these CME courses are in Costa Rica, Jamaica, Miami, etc… It is a legitimate business expense.
So, go on a few CME vacations a year as a proud and productive nurse practitioner business owner. I sure as hell do!