Take your Home-Business Tax Advantages to the Bank!

You may be able to put an additional $5,000 of spending money per year in your pocket if you conduct your home business as a real business.

How...?

As a home based travel agent, you are entitled to a every advantageous collection of tax breaks which will enable you to reclaim thousands of dollars in taxes -- dollars normally taken out of your day job paychecks by the IRS.

The good tax laws that allow small business owners (that's YOU) to garner substantial tax breaks are the same laws that GM and IBM benefit from. The only difference between most home businesses and these Fortune 500 entities in the eyes of the IRS is their size, and the fact that home travel agents can also deduct many expenses from their daily lives. If these expenses contribute to the success of their home home-based business, then they are fully tax deductible!

What is deductible by a home home-based travel agent?

When you are out to lunch or dinner with other travel agents, prospects, and friends, and you discuss "business", your meal is 50 percent tax deductible. For that matter, so are theater and sports event tickets, and other expenses relating to entertainment focused on building relationships with prospects, customers and other travel agents. (Remember, by definition, everyone is a potential prospect or customer of your home business!)

Automobile mileage is deductible between your home-based business office and a meeting where business is discussed, such as the meals mentioned above, or a travel expo -- or even a golf outing with friends who are prospects!

Travel is deductible -- be it to an industrial center or an island resort -- if the purpose is to hold a meeting, to discuss business with other travelers, to attend a business related seminar.  In the case of travel agents, you may also be able to deduct your travel if it is for the purpose of familiarizing yourself with a resort, ship, tour, etc. Your spouse's travel can even be deductible if their presence is helpful in conducting your business.

You can also deduct wages paid to your children for help in the business -- and if those children are under 14 and have no other sources of income, all wages under $4,000 per year are tax free. It's a great way to help save for college with Uncle Sam's help!

You can set up a qualified medical expense reimbursement plan and pay for expenses like braces, eyeglasses and visits to the doctor with pre-tax dollars if the plan is properly structured -- this is easy to do with standard forms.

Home computers, fax machines, telephones, office supplies, and office furniture are also fully tax deductible. But there's more....

The IRS's only requirement is that you legitimately treat your home business as a business -- not a hobby. That means regularly working your business.  Hand out your business card, talk to everyone, all the time, everywhere you go about travel.  Let them know you are a travel agent and would appreciate their business.

Documentation and Accurate Records of Tax Deductions

Documentation and accurate records of tax deductions are vital if you want to be able to substanciate your deductions should the IRS every chalange you tax return.  The following article by Kevin Wilke talks about the problem and provides a good answer.  While it talks primarily in terms of "Internet" business, it is still very well suited for home-based travel agents.

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