There are three main ways I keep my homeschooling family on the road for months at a time. In order of importance, they are:
- Being frugal in our travels and in our daily lives,
- Finding ways to make money on the road, and
- Using advanced techniques to get more free flights and money.
Today, we’re going to discuss some of one of those techniques – using a tax-registered business to get more free flights and money.
Use your business to earn free flights and money
To get the most mileage out of your travel mile hobby, consider having your own tax-registered business. It should have its own Employer Identification Number (EIN) and business credit score and history. Here’s why.
- It’s easier to apply for business card: No follow-up calls needed to explain how you have a thriving business walking dogs and baby-sitting.
- Business cards do not count for Chase’s 5/24 rule: Have the American Express Business Gold card (read our review) and want the Amex Business Platinum (read our review) too? Go for it! Might as add a Gold Delta Skymiles card later too. Aside from the credit score hard pull during application, these cards don’t impact your credit history.
- Bank Bonus sign ups: It’s simpler to open a new business checking account to grab those bank bonuses with an EIN. Also, some banks requires ACH transfers set up by an employer before awarding bonuses for new personal checking accounts. If you are your own employer, that’s a no-brainer.
- Lower your taxes by turning your vacation into business expenses: When you have a business, it becomes possible to turn the cost of travel into a valid business expense. This may lower your taxes, even if most of your income is from W-2 employment.
- Get more Mileage from your Amex Mileage Rewards: When you book a flight on the Amex travel portal, you get 50% of the Member Rewards points back. This works if you have an American Express Business Platinum card and book the flight on a pre-designated airline.
Two tax-registered businesses = twice the fun!
All of us can only have one social security number. But every business you own can have more than one EIN, with its own business credit score and set of credit cards.
This could potentially give your travel mile hobby a huge boost. Here’s how:
- More credit card signup bonuses: Each of your businesses can get its own business card, even from the same card issuer. Both my businesses each have a Chase Ink Plus, an American Express Business Platinum card, and an American Express SPG Card. That’s six cards for both businesses, and I’m only getting started. I would start with Chase business cards first, since each Chase business card WILL count towards its 5/24 restriction.
- More business checking account bonuses! A second business will double your opportunity to get more signup bonuses.
- Doubling Down on Amex Perks: When you have two American Express Business Platinum cards for each of your businesses, you get to designate two different airlines to get 50% of your Member Reward points back. This opens up your options tremendously. I currently have United on one business platinum card, and Alaska airlines on the other.
What are the downsides?
The biggest downside is potential complexity. Thankfully there are lots of apps that help with organizing and tracking everything.
The other thing to look out for is tax and earnings reporting. Every state is different, and I am no CPA, so consult a tax professional who knows small business tax laws where you live.
That said, in general, you may be required to file with your state’s Department of Revenue quarterly or annually. You’ll also be required to file an annual tax return with the state (if your state has an income tax) and the IRS.
Hire a CPA well versed in small business tax for the first year to show you the ropes. A good CPA is worth every penny, and I mine is my travel hacking enabler and partner in planning my retirement savings.
If you are serious about accumulating a wealth of travel miles, start thinking about getting into the world of EINs, business credit cards and bank bonuses.