Recently, I stumbled across a concept that could change your financial life. You can call it a paradigm shift or a new perspective or just a different way to look at things. This single concept can save you tens of thousands of dollars each year. Its so powerful and yet its completely underutilized. Learning this simple technique can dramatically impact your financial picture. I was speaking about tax savings at a seminar and there was a spontaneous outburst of questions. Can I deduct my health insurance? How about my new truck? I'm taking horseback riding lessons. Are they deductible? What about my vacation? As we worked through people's list of concerns, it dawned on me. You've been trained to ask the wrong question. Let's suppose you call up your C.P.A. and ask, “Hey Lenny, Can I deduct a Pizza? What do you suppose Lenny's response would be? He'd probably think you had gone mad – “Are you crazy, he'd say. You can't deduct a Pizza!”.
But if you called me and asked the same question, you'd get a different response altogether. I'd probably pause for a moment and respond “Well, that depends.” You see, if you and I went to an Italian restaurant and ordered Pizza and a couple of beers, the meal would be deductible (at the rate of 50%) so long as we discussed business. Same thing with your vacation if you conducted your annual meeting while you traveled. The equestrian lessons are deductible as education and the new truck is deductible to the degree that you use it for business. Which brings up a key point: It's not the item, it's the circumstances. Most business people and their advisors wrongly focus on the item (the truck, the lessons, and the trip). The trick is to make your circumstances open the door to the tax deductions. So, instead of asking “Is this deductible” – you should start asking how is this deductible? Then, all you have to do is create the circumstances that allow for the deduction!