Managing Your Travel Business: Mastering Your Home-Based Taxes
by John Hawks

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(As with any discussion of taxes, you should always consult your own accountant and attorney before you claim any deductions on your taxes. This article will simply raise questions that you can discuss with your advisers.)

One of the biggest tax benefits of owning a home-based travel business is deducting a portion of your home or apartment expenses as tax-deductible business expenses. For example, you may qualify to deduct a prorated share (based on the percentage of space you use strictly for your travel business) of your rent, utilities, property/tenants insurance, property taxes, and mortgage interest. If you repair or remodel your home office space, those costs may be deductible, too.

To figure out how much you may deduct, you'll need to calculate the percentage of your home or apartment that's used strictly for your business. You can divide the number of square feet used for your travel business by the total square feet in your entire house or apartment; then, you can multiply your expenses by that percentage.

Working with your tax advisers, you should qualify to depreciate the cost of office furniture, equipment, and fixtures in your home office. (In fact, many home-based agents may be able to write off as much as $17,500 in business equipment costs each year.)

Here's one big catch: Your home office area must be used "exclusively and on a regular basis" (using the tax man's terms) as the principal location of your home-based travel business. That means you can't mix your office with, say, your den. That spare bedroom or basement that you use for your home office must be set aside for use only as your office.

As you might imagine, lots of people try to claim these kinds of deductions every year. To improve your chances of qualifying, keep meticulous records of the work you do in your exclusive home office, including a few photographs of the office space and your calendars or planning sheets that document the work you've done throughout the year in your home office. And, try to use your home office address on your business cards, stationery, ads, and bank accounts as further proof to support your deduction.

Want to learn more about the fine art of home business deductions? At the official IRS Web site, read through Publication 587 ("Business Use of Your Home"), which gives lots of solid information on this subject. (And, again, don't try this at home! It pays to seek the advice of your accountant or your attorney.)