Time For a Vacation, But Don’t Forget Taxes!

You’ve found a great deal on flights, a perfect hotel room minutes away from the beach, and an affordable rental car that will get you and your family of four around town. However, what you may not have taken into account are potential taxes, which could turn your carefully budgeted summer getaway into a lot more than you bargained for.

Of course, don’t allow taxes to deter you from your dream vacation. But be aware once the destination is chosen of the impact that taxes can have. Chicago has the highest total tax burden, where travelers are paying an extra $41.04 a day. New York City follows with an additional tax burden of $38.65 per day. The lowest tax burden – $22.61 a day – can be found in Fort Lauderdale. This summer, taxes on restaurants, hotels and rental cars are estimated to cost travelers more than $30 a day, which could easily put a family well above budget.

Since the 1990s, taxes on the travel industry have been on the rise. Many cities argue that this is the ideal way to increase revenue without increasing the tax burden of residents. Finding specific tax rates for your desired destination is relatively easy, and most major cities provide this information on their websites. One simple way to plan ahead is by finding deals on travel sites such as Orbitz and Expedia, which will provide you with the total cost of the hotel room – including taxes – once you select specific rates and the dates you are planning to visit. Additionally, you don’t need to provide your credit card or any personal information to get the estimate.

Rental cars are also subject to additional taxes. Keep in mind that renting a car from an off-airport location will also save you the airport concession fee, which can be anywhere from 11 to 13 percent of your total fee. Most important is to do your research to find the best total cost, including taxes and additional fees.

Whether you’re planning a summer vacation for your entire family or just yourself, being aware of certain tax burdens in your desired location can save you a lot of money. Our professional accountants at Staszak & Company can help you with your complete financial picture, for all of your budgeting needs.