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Deep Work Tax Deductions

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Deep work tax deductions might mean you work someplace isolated and without distraction.On a recent vacation, I read Cal Newport’s book, “Deep Work.” Which got me thinking about tax deductions for deep work. Newport’s ideas have great merit. Probably you want to think both about formally incorporating deep work into your year if you’re a business owner. And you want to know how deep work tax deductions work. And then when they don’t.

But this subject requires some background. Let me provide that first.

Some Background Context

Newport’s book talks about the benefits of workers taking time away from the hustle, noise and distractions of the typical workplace. The worker—the business owner in my discussion here—then uses that time to do deep work.

What is “deep work?” Cal Newport defines the term in his book Deep Work: Rules for Focused Success in a Distracted World as,

Professional activities performed in a state of distraction-free concentration that push your cognitive capabilities to their limit. These efforts create new value, improve your skill, and are hard to replicate.

Newport contrasts deep work with shallow work, which he describes as:

Non-cognitively demanding, logistical-style tasks, often performed while distracted. These efforts tend to not create much new value in the world and are easy to replicate.

And then, just to fall a little deeper down the rabbit hole: Deep work works and looks different than shallow work. The key features of deep work include:

  1. Focus and Intensity: It requires uninterrupted, focused attention.
  2. Cognitive Demand: It challenges the mind and pushes intellectual limits.
  3. Value Creation: It results in high-value output, such as innovative ideas, advanced problem-solving, or high-quality work products.
  4. Skill Building: It strengthens expertise and fosters growth in one’s abilities.
  5. Rarity: Deep work is increasingly rare in a world full of distractions and shallow tasks, which is why it’s a valuable and competitive skill.

Examples of deep work might include:

  • Writing a book, report, or blog post with high analytical or creative content.
  • Solving complex technical or mathematical problems.
  • Learning a new, difficult skill.
  • Developing long-term strategies or plans.

Where to Do Deep Work is the Next Question

Let me briefly summarize one other aspect of deep work. Newport suggests working outside of the regular office or workplace. Particularly if the office environment is prone to distractions.

Newport emphasizes, for example, the importance of minimizing interruptions and creating a dedicated space that supports focused, high-cognitive-demand tasks. Predictably, successful deep work might include or even require physically removing oneself from a noisy or distraction-filled office.

Some specific suggestions from Newport:

  1. Isolation for Focus: Newport highlights that many knowledge workers benefit from setting up a “deep work location” away from their regular workplace. This could be a library, a home office, or even a rented space.
  2. Workplace Retreats: He describes the idea of short-term retreats to a different location, such as a cabin or a quiet space, to focus on specific deep work projects.
  3. Control Your Environment: The regular workplace often prioritizes accessibility and responsiveness (e.g., open offices, constant communication tools), which are incompatible with deep work. Working in a controlled environment with fewer distractions allows for extended periods of focus.
  4. Routines and Rituals: Newport advises creating rituals to signal your brain that it’s time for deep work. If the workplace doesn’t facilitate this, an alternative location can help establish these routines.

He goes on to discuss practical considerations, too. If you or I are thinking about deep work, we want a location that allows for distraction-free time, free from social interruptions and electronic notifications. That location needs to provide the tools and resources necessary to accomplish the work (e.g., Wi-Fi, books, notes). Logically, consistency in using the space helps train your mind to associate it with deep work.

While Newport acknowledges that not everyone can leave the workplace regularly, he suggests that for those who can, it’s an effective way to reclaim focus and produce high-value work. And that’s why I think you and I need to think about deep work. More specifically, how we get more deep work into our annual work schedules. And now we’re ready to talk about deep work tax deductions.

Rules for Deep Work Tax Deductions

So, the obvious question: Can you deduct the costs of doing deep work? My answer, supported by the research Newport reviews in his book, is “yes.”

Two important requirements, however: First, you or I need to think about deep work costs as investments that deliver a profitable return on investment. For the tax nerds reading this, we might say the expenditures connected for deep work need to meet the Section 162 standard. Essentially that standard says the expense must be ordinary and necessary and connected to a profit motive. (For more detail about how to apply this general rule to travel expenses which is often what deep work tax deductions will be, you can refer to Treasury Regulation 1.162-2.)

Tip: If you or I were considering a large investment in deep work, doing the work of creating a formal business with estimated returns on investments seems essential. You want to do that to verify what you’re thinking about makes sense. You want to have that business plan or capital investment analysis documented later on if someone like an IRS examiner has questions.

The second thing to stay alert to? Travel expenses—which again will often be what deep work investments represent—also require significant additional documentation. Section 274(d) and regulation 1.274-5 give specific instructions. But essentially you or I need to document contemporaneously:

        • The business purpose of the expense.
        • The amount of the expense.
        • The time and place of travel or the date and description of the meal or entertainment.
        • The business relationship to the individuals involved (for meals and entertainment).

Note: The IRS website provides more and detailed information here: https://www.irs.gov/taxtopics/tc511

Risks of Deep Work Tax Deductions

Three risks of deep work tax deductions need to be considered:

  1. If your tax return with the deep work deductions gets audited? My guess is that auditor will find your deep work focus strange. Possibly at least a little sketchy. The base salary of an IRS examiner as I write this is about $60,000 a year. Thus, that man or woman, perhaps understandably, may struggle to understand why you have invested $20,000, $50,000 or whatever on some seemingly “harebrained scheme” to turn your $200,000 business into a $2,000,000 business. Thus, stay alert to the optics here. How you present and describe your deep work may matter a lot if a tax agency auditor asks. (I really would recommend reading Newport’s book and then honestly asking yourself if you can make deep work “work.”)
  2. You need to do the deep work to get the deductions. That sounds too obvious. But deep work isn’t the same thing as a vacation. You and your family need vacations too. So maybe the actionable step here is to make sure you get vacation-y work breaks into your year too?
  3. International travel to be deductible requires a higher, more rigorous level of documentation and work. (You essentially need to work full-time.) Thus, you probably want to avoid that approach. Domestic travel in comparison only requires that your travel primarily be for business and not extravagant.