Drake Software blog for tax pros, covering tax, IRS news, and more

Rethinking Your Vacation Plans

For many tax preparers and CPAs, the post-tax season vacation is a family ritual.  Plans and reservations are made far in advance, and may involve a return to a familiar destination – from the Hamptons or Florida to San Antonio’s River Walk or Seattle.

But for others, this vacation is a time of exploration to new places to unwind.  Tax season is over, the last of the stragglers and state taxes complete, and the corporate and nonprofit clients safely filed away. In years past, modest revenues and future uncertainty have largely limited such travels to local destinations.

But that’s not the case this year. Revenues for tax preparation increased, due to additional work required under the Affordable Care Act and the last-minute changes to the tax law with respect to credits. At the same time, the surging strength of the American dollar against other currencies make foreign travel for your vacation not only possible but very affordable.

Consider the current exchange rates. The euro, which in years past has traded for as much as $2.50 US, is now trading at €.89 per US dollar. The Mexican peso can now be exchanged at the rate of 15.6 pesos per dollar. The Australian dollar, meanwhile, is down by almost 30% –  $1.00 US will net $1.28 AU.

What this means is for the first time in nearly a decade, international travel is not only affordable but with a little careful selection can be a bargain. Let’s consider some basic rules of travel overseas, and a few delightful destinations.

Here are some basics for the international traveler:

  • If your passport is more than 10 years old, get an application for a new one into the system immediately. If your travel plans are more immediate (and at this point you’d be better off looking for June or July), there are expediting services to help you get your passport very quickly – but at a cost.
  • Depending on the country you wish to travel in, check the visa requirements and make sure to apply for a visa at the same time. The nearest consulate or embassy for that country can assist you very easily, and visas are not required for tourist travel to many countries.
  • Get a copy of your immunization record, and have your county health department validate whether any additional immunizations are required for your destination. Be aware that many seemingly safe countries have serious problems with malarial mosquitoes.
  • Check to ensure that your health insurance card is acceptable at your destination (or plan to purchase travel health insurance).
  • Check your auto insurance company to see whether your coverage is valid in your destination country if it is not either pick up inexpensive insurance in that country or don’t drive. In most other countries, public transportation is available and inexpensive – though not always pleasant.
  • Don’t carry cash, traveler’s checks, or money orders. Instead, request a new debit card from your bank and transfer money over to it as needed. If the card is lost or stolen, you can generally get a replacement overnight from your bank without a lot of difficulty. Also, beware that ATM machines will give you the best exchange rate for local currency. Again take only the money out of the ATM machine that you will need for a day or two, or for planned activities.
  • Turn off your cell phone as you leave the US. When you arrive at your destination country rent or buy an inexpensive cell phone with a SIM card. This will avoid embarrassingly huge data charges around the world, and may permit for cheaper calls back to the US.
  • If possible, take a tablet or laptop with you, loaded with Skype or another calling program. This is the cheapest way to phone home, and to other countries as well. It also provides video capabilities so that friends and relatives you check in with can see you speaking.
  • Check with US Customs and Border Control for information about duties on overseas purchases and other matters. Hint: items purchased through the “duty-free shops” are only a bargain on selected items – chocolates, liquor, cigarettes, and the like.
  • Finally, continue to read all the information available on the travel site of the US State Department: There is a substantial amount of information for older travelers, disabled travelers, traveling with pets, traveling with partners, and other topics.

A strengthening dollar and an improved market for tax preparation services have made international travel more affordable than any time in the last decade.  If your plans are not finalized for your post tax season vacation, consider a vacation to anywhere in the four corners of the earth.

 

 

admin taxing_subjects

The Taxing Subjects staff is proud to cover the latest in tax-industry-related news, from tax law and IRS updates to technology and business strategies. If you have questions about an article or just want to reach out to the Taxing Subjects staff, email comments@taxingsubjects.com.

comments powered by Disqus