Travel Writing – on IRS’ Dime

by in Tax Issues

Several years ago, a client to came to me during tax season all excited about her new business. She was now a freelance travel writer.

Wow. That sounds like such fun, doesn’t it? I asked her how this came about. Well, she took a community college class one Saturday afternoon for about 2 hours about travel writing. The instructor explained all about how they could take terrific trips and cruises and write them all off on their tax returns.

“No kidding?” I said. “And how much money did you earn last year as a travel writer?”

“Well, nothing,” said she.

“And how much did you spend?” I asked with trepidation.

“Here, I have all my receipts for over $5,000 worth of cruises and trips.”

After I gently explained the facts of life to her, this long-time client was furious – with me. Not with herself (for not consulting with me before embarking on this venture). Not with the instructor who gave her false, perhaps fraudulent, information – but enraged at the messenger.

On the other hand, this morning, someone else asked TaxMama® about starting to be a travel writer – and how to do it properly. He apparently has been successful with his online presences – and now wants to use those skills to indulge his wanderlust.

Here’s how to do this correctly:

Fundamentally, if you want to deduct the cost of your travel to fun places, purely as a travel writer (rather than as part of a business trip), there’s ONE rule. The travel writing must be a business – not a hobby.

To be a business?

It must show a profit – or have a realistic expectation of showing a profit.

So, you’re Internet savvy and know how to monetize a site. Fine.

Set up the travel site. Set it up to be monetized (via affiliate programs, direct advertisting, Adwords, etc.) Build traffic and clicks like crazy.  And make sure your income from the site is more than your travel expenses.

I recommend that you start with lower-cost travel initially. Take some local trips, or trips as part of your regular business travel – and take stunning photos. Write interesting articles that provide specific and useful information to the traveler.

For instance, consider setting up a format that contains an information box with specific information you provide in each article:

  • How to get there (local airports/airlines, train stations, etc.)
  • Best places to stay
  • Local transportation (buses/shuttles, cabs etc.)
  • And so forth.

Once you’ve shown even a small profit – and a following, the first year, you can increase your costs the following year.

Design a business plan that outlines how the site will be monetized and promoted – and follow the plan.  Report the business as a separate Schedule C on your tax return. You don’t have to set it up in an LLC or anything, since it’s not your main business.

 

About the Author - Eva Rosenberg

Eva Rosenberg, EA, founder of the popular tax advice site, www.TaxMama.com, is a nationally syndicated Dow Jones columnist at MarketWatch.com, an author and popular speaker and instructor. Please join the TaxMama family and get answers to your own tax questions.

 

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