Tax Tips for Travel Agents

by Anna Gleksman
Tax Tips for Travel Agents

Photo: Youtube.

Did you really procrastinate until now to deal with your taxes?

For those who failed to pay heed to the advice in our December article, here’s a recap of some of the tips for independent and home-based travel agents—and some ideas to get you off on the right foot for 2016.

Thanks to Louis DeMars, of AVM DeMars CPAs, LLP, in Williston Park, NY.

Be organized.
The more organized you are, the more deductions you can claim and the faster you can file. It’s not necessary to tape each receipt into a scrapbook and file them in chronological order, but storing all your business expenses in one file, and keeping a running tally of the totals for each category in QuickBooks or even Excel, takes just a few minutes and goes a long way toward making the process simpler.

Know your dates.
The last day of the tax season has been extended by three days this year to April 18.

Keep your data safe.
This is prime time for scammers, who love to access the Social Security numbers of unsuspecting folks, and beat you to the punch by filing for your refund. So be sure to always use a secure server when filing taxes or sending information to an accountant. Ask your accountant about the steps he or she takes to guard your personal information, and whether the information is backed up and stored safely.

If the phone rings, it’s not the IRS calling.
If you ever receive a call from the IRS telling you that you owe money for taxes or a threatening email asking for personal information, just ignore it. The IRS only contacts taxpayers through the address on their tax forms.

Don’t forget to deduct health insurance premiums.
One of the most frequent errors of small-business owners is not deducting their health insurance premiums. You may also be able to deduct commercial vehicle insurance and life insurance premiums; ask your accountant or look carefully at the IRS website.

Understand the difference between equipment and supplies.
Equipment (also called capital expenditures) typically includes things that do not need to be replenished every year, such as software programs, computers, and office furniture. You can write off the cost of new equipment (up to $500,000) in one year, or depreciate it over time. Supplies purchased throughout the year, such as pens, paper, and ink, are written off in the year they are purchased.

Know when to call for help. (That would be about now.)
Do you understand how much to pay quarterly taxes in order to avoid an estimated tax penalty? Have you considered deferring income or accelerating deductions to cut your tax bill? Do you understand how pension planning can lower your taxes? If not, take a course, contact the resources below, or call an accountant.

Consider taking the home office deduction.
A change in IRS regulations last year allows those who work at home to use a simplified deduction to write off their home offices. Previously, you had to calculate the figures and store receipts to back up your claim, and claiming a home-office deduction was a red flag for the IRS—but now you can just claim a flat $1,500 deduction. Your home office must be used exclusively for work, however, so no, you cannot have a gym or a guest bedroom set up in there.

Maximize your deductions for the year.
Make sure you have done all you can to take advantage of the deductions to which you are legally entitled. If you have not maxed out your IRA or 401(k) contribution and can afford to put in a little more, do it before April 15 and take the deduction right away rather than waiting until 2017. If you are 59.5 years old or older, you can deposit money in your IRA before April 15 to claim the deduction, and then withdraw it without penalty later on if you need it.

Tip of the Day
Daily Top List

Best Travel Destinations Within 5 Hours of NY

1. Bermuda

2. Iceland

3. Miami

4. Austin

5. Tulum

Source: Business Insider


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