ED U C AT I O N
Tax Planning for Your Travel Business
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business saw at least a 50% drop in gross receipts from 2019 (which likely applies to every business in the travel industry), you’re eligible to claim up to 50% of $10,000 in annual wages
The past two years have seen constant changes to tax laws in
per employee. The rules changed for the first three quarters
a government effort to aid struggling businesses. While helpful,
of 2021—your business only had to see a 20% drop, and you
it’s difficult to keep up with if you’re not an expert, which means
can claim up to 70% of $10,000 in wages paid each eligible
you and your business might be losing out on big benefits.
quarter (Q1, Q2 and Q3 only) per employee.
Navigating the many tax laws out there is not an easy task,
It’s not too late. You still have time to take advantage of the
especially with the possibility of an audit dangling over your
ERC, even for 2020, and even if you received money from the
head, as unlikely as it may be. Inflation, donations, deductions,
Paycheck Protection Program (PPP).
employee retention credits, remote work—these are all important financial issues that have seen change recently.
Remote Staff. There’s been a lot of discussion around the benefits and drawbacks of remote work, but it’s a financial
To plan properly for the next tax season, we turn to the
issue, as well. If the employee is living in another state, you’ll
experts like William Caldwell, CEO of Caldwell CPAs, who
need to be sure to register payroll accounts in their state,
frequently works with businesses in the travel industry. Here
and file a tax return in that state. It’s also good to learn the
are some of his top tips for keeping up with the financial times
local payroll laws. Caldwell gave an example of a business
and planning for 2023.
that terminated a remote employee, but didn’t know about
Inflation Reduction Act. Let’s start with something that
California’s law requiring the final paycheck to be paid out
actually isn’t that much of a concern. While you may have
days later. The check went out later, on their typical payday,
heard this new act increases the IRS enforcement budget by
resulting in a hefty fine from California.
$45 billion over 10 years, the idea of the agency actually finding
Tax Planning = Tax Savings. Caldwell strongly suggests
80,000 new people for enforcement is “a pipe dream,” according
maximizing every possible deduction for your business.
to Caldwell. There simply aren’t enough accountants out there,
Have a home office? Utilities, renovations, pools, interest,
so don’t worry about the IRS kicking in your door anytime soon.
and more can all be deducted, believe it or not. Vehicles over
Employee Retention Credit. This is a huge benefit that every
6,000 lbs. can be deducted, as well. Driving from your home
business owner needs to know about, a tax credit that can be claimed against wages paid in 2020 and 2021. In 2020, if your
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By Josh Veal
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