topic Are monies collected from customers as a tour deposit, then later sent to the tour company considered travel expenses for my company? Are the monies considered income? in Get your taxes done using TurboTax

Are monies collected from customers as a tour deposit, then later sent to the tour company considered travel expenses for my company? Are the monies considered income?

Anonymous — Fri, 31 Jan 2020 22:02:32 GMT

Re: Are monies collected from customers as a tour deposit, then later sent to the tour company co...

MaryK4 — Fri, 31 Jan 2020 22:23:21 GMT

If you report them as income, then you would expense them (so you would even out). In general, it would depend on your accounting methods.

Re: Are monies collected from customers as a tour deposit, then later sent to the tour company co...

Anonymous — Sat, 01 Feb 2020 19:06:21 GMT

I’m wondering if there is a better category to choose for the expense (tax wise) rather than travel, since the expense is not for my travel.
Thanks!

Re: Are monies collected from customers as a tour deposit, then later sent to the tour company co...

VictoriaD75 — Wed, 05 Feb 2020 22:02:43 GMT

From an accounting perspective, you could set these deposits up as a liability, rather than income. For example, you collect the cash, but you have to pay them to another entity. They are not yours to keep, nor are they funds collected specifically for your services. You could name the liability account something in the nature of "Upfront Deposit." When you issue payment to the tour company, the liability has now been satisfied.

Handling the entry in this matter affects balance sheet accounts only: assets for the cash received/paid, and liabilities for the amount due and payment. This does not affect any income or expenses for your business.

However, if you take any fees from these particular funds, you will need to account for them as income.