“That’s a Write Off”… but could you have earned INCOME too?

“I don’t know if I can live on my income or not–the government won’t let me try it.”

Bob Thaves

Every entrepreneur’s favorite phrase is “that’s a write off”. Many of them are very un-clear about exactly what a legal write off is. Or they have a vague idea about what a write off is. Or they truly DO know, but are hoping the IRS is too busy to look deep into the details of their returns to verify the accuracy of all the write-off’s claimed. <<EEK!>>

And if you’re really uncertain of what is allowed and what isn’t — you simply hire a tax accountant to handle all of those questions for you! 

Have you ever considered as a small business owner/sole proprietor/entrepreneur starting a NEW business SOLELY for the tax benefits?

Probably not. You may be thinking, “I started my business out of my PASSION for my business, service, product, idea and I do not want any distraction from building this passion into success!”

Trust me, I hear you and I feel you.

\And, there may be value in looking into adding verticals to your business plan that require very little effort from you but bring HUGE benefits around the annual tax season. 

Let’s Explore Some Key Questions Together:

• Do you currently travel for your business? Traveling to locations for conferences, for speaking engagements, for training or for consultation meetings? When you travel, are you booking flights, hotels or rental cars? 
• Have you ever considered hosting retreats for your clients or hosting a training conference? 
• Do you have a full time job but LOVE teaching yoga, group fitness, meditation or another passion outside of your full time career? 
• Does your work make taking LEISURE vacations with your family difficult because of the time or money involved? 

AND NOW FOR THE ULTIMATE QUESTION TO CONSIDER: HAVE YOU EVER CONSIDERED BECOMING AN INDEPENDENT TRAVEL AGENT? 

That question may seem out of the blue or you may be thinking, “No, I’ve never considered that because my passion is not TRAVEL”.

Fair enough. But scrolling back through questions 1-4 about travel related to your passion or to your business… how many times did you answer “yes”?

 If so… here’s a secret — if you’re booking that kind of business travel, you are already doing the work of a travel agent. Sadly, you just simply are not being paid for that work. 

Now, you may be thinking, I am getting paid because all of that business travel is a “tax write off”! We’ve mentioned that phrase earlier.

While I am not a certified accountant (I played one on tv once… but that’s another story), I do know that business travel is indeed a tax write off. Hooray!!

But did you get paid for the TIME it took to book the flight, hotel, rental car? Are you certain that you found the best rate for those bookings as well?

These are things you probably never thought twice about because the time is “minimal” and the research in getting the “best price” is less important because it’s “for my business” so I’m less concerned with price. 

Double Dipping or Triple Dipping

I love a dual purpose anything. I still get super excited if I can accomplish two errands in one trip especially if I’m driving more than forty-five minutes to a location.

If I can meet up with a friend, and get my car serviced and return something to a store in that area, that forty five minute trip is a triple win! 

I’m even more excited when there are double or triple dipping opportunities for earning income in business. Imagine this scenario:

You are a speaker with an engagement in another state. You need a flight, a hotel room for the evening, and are choosing a rental car.

Your speaking rate is covering the expense of these three items and because you have a business as a speaker, you are writing off the expense against that income on your taxes.

But if you booked these items as an independent travel agent, you would also earn a commission from that booking. 

1. Speaker Income
2. Tax write off of the flight, hotel, rental car expense
3. Travel Agent Income: Commissions from booking the above
4. Also a tax write off against your travel agent income

Now — consult with your tax accountant on whether or not expenses can be written off twice in two separate businesses… but the income from each is something I can confirm. 

Benefits of a Host Agency

The travel agent industry has changed a lot over the last decade or two. Host agencies are more available and more popular than before. Copied straight from a google search: 

“Host agencies are businesses that affiliate with home-based travel agents in an independent contractor agreement.”

If you were to google “host travel agencies” your search will return hundreds of results. Everything from niche agencies, to large conglomerates to smaller mom and pop type agencies.

The purpose of the host agency is to house all of the travel credentials and the travel provider relationships.

This allows you, the independent contractor travel agent to have access to large brands like Disney, Hilton, Marriot, Delta, etc without having to establish credibility within the travel industry.

You are paying for and using the host agencies credentials to allow you to book travel as an agent.

That payment typically comes by way of a set up fee and a monthly fee plus a commission split on every booking between the independent contractor and the host agency. 

Let’s Talk Taxes and How to Lower Them

When starting a new business, start up costs are tax deductible. This could mean, that you could add a travel component to your existing business and fully write off any of the costs associated with starting this business.

Again — please consult those who are actually certified in tax planning before making any firm decisions. 

As a travel agent, you will earn commissions on virtually any travel booked even if YOU are the customer.

Many host agencies do not have sales quotas either. You can become a travel agent with a host company and ONLY book travel for yourself or your own business.

This means, this added business opportunity only SERVES your current goals without distracting from your existing business or passion. 

Learning Curve

Time is our most valued possession and I know many of you are thinking I don’t have time to “figure out” how to be a travel agent in addition to everything I ’m already doing.

Like I said earlier, if you are currently booking travel online using online search engines or online booking tools, you are already skilled enough to be a travel agent and earn a commission on those same activities. 

If you get started there and want to do a little more “advanced” searching, planning, booking… like for instance if you teach yoga and want to host a yoga retreat, you would be surprised how helpful customer service agents are when you call and introduce yourself as a travel agent looking to book with their property. 

The opportunities abound for as much or as little as you would like to do.

And all of it can benefit you as a business owner. Oh and the trainings are typically free and if they aren’t — there’s just yet another tax write off. 

I believe we all should pay our taxes with a smile. I tried, but they wanted cash.

I’ve heard the saying the only two things that are certain in life are death and taxes… but I ’d like to add that travel is pretty certain too.

Yes, we have become very accustomed to online meetings and a virtual world, but business travel and leisure travel will forever abound.

I simply propose that like in all things, we just simply find ways to do it better and keep more income in our pockets.