Become a Travel Agent

Home Based Travel Agents
Making Taxes Less Taxing

Before I begin this article I want to suggest that you always get the professional advise of a tax attorney or CPA and when in doubt check with the IRS to make sure you are doing all you can to comply with the necessary tax guidelines. 

That said, following are some helpful tips you might find useful for next year’s tax time. While we are well into 2004 already, perhaps some of these things will be useful in preparing for 2005 and the years to come.

Calendars & Appointment Books
Keeping an appointment book while not necessarily techie in today’s hand held computer world is still a great way to keep track of expenses.  Notations can be made on your calendar providing necessary back up to go along with your receipts.

My husband, Tom, always buys two identical appointment books every year. One is meant to keep his appointments and to jot notes in but the other is where he puts receipts for each day of the year if applicable. He simply tosses the receipts in there and his other calendar helps him to remember what they are for or fills in some of the memory blanks.  Always keep this with that year’s tax records for easy access and follow up if need be.

Credit Cards for Business Use
Always try to use one card for your business expenses. Most travel agents use cards that offer good mileage credits and there are even those that offer cruise purchase benefits as well. You might as well get the most bang for your buck. While it is certainly possible to have it in the company’s name it is not necessary.

Most personal credit card interest is not deductible however business credit card interest certainly is so you might want to take advantage of this advantage.

It is also important to keep all of your original credit card receipts, as the monthly summaries do not provide specific information that may be necessary. It is also a good idea to keep your receipts no matter what the amount. You may be asked to provide back up information and if you no longer have the receipt it will be almost impossible unless you wrote it all down.

Business Accounts
If you have read our book How to Start a Home Based Travel Agency or have been to any of our seminars you probably know what I am going to suggest. While you certainly need a business account that is used strictly for business, I am going to suggest you have two. Open one account for your basic operating account and one for your client funds and disbursement to the vendors of client funds.  This is a very simple way to keep great records and you will be able to daily see where you stand, as you are never combining those two-dollar flows.

Try to write only business checks out of these accounts and make only business deposits to them as well.  You can transfer money from one to the other as needed but you certainly want to record details about that type of transaction.  Keeping this separate from personal accounts will help keep all your business records in one place and easy to review.

Deposit Details
Always keep good records of your deposits when money is going in such as a simple notation like Deposit for Jones Hawaii Trip 5-04.  What you don’t want to happen is to be taxed on income that might be a loan or a gift so keeping track of the deposits in both accounts is helpful.