Many people pursue the dream of owning a B&B to gain more independence, live in tourist destinations, and lead a lifestyle outside of the traditional corporate world.
In addition to these intangibles, there are also quite a number of tax benefits that you should take advantage of, according to Little Hotelier and the financial advice website sapling.com. While you can deduct the most obvious expenses required for running your innkeeping business, here are a few less obvious ideas for lowering your tax burden, as well:
- Less obvious items used by guests are deductible, such as magazines
- The cost of your health insurance premium is often deductible because of being self-employed as an innkeeper
- You can get travel reimbursement for the use of your car to transport your guests or perform any other tasks for your business
- Leverage the benefit of depreciation of your property for rooms used exclusively by guests
- Your payroll taxes can be lowered when hiring family members — especially children and parents
- Contributions to an IRA may be a way to both lower your tax burden and save for retirement
You should consult your tax advisor to determine if any of these ideas are viable for your situation. Oftentimes the challenge lies in needing accurate documentation and bookkeeping to be able to take advantage of these strategies. But if that is a challenge, you can always hire a talented bookkeeper and probably deduct that expense, as well!