Back to Listing
6 Tax Deduction Tips For Real Estate Agent
17 December 2018
Tax season is arriving!
If you are in the real estate business and manage your finances on your own, it
is tough to find time to get expenses recorded in a timely manner. Hence, many
real estate agents prefer to hire an in-house accountant or outsource
accounting firm so that they can keep accurate financial records all the time.
It helps them to know
the real financial value of the business and all the accounts payable
and receivable. These financial reports help them to deal with the tax
season so they can avoid the tax penalty.
tips for every real estate agent whether you are doing your taxes on your own
or hiring an accounting firm.
1. Don’t forget
your vehicle mileage
You spend your high
amount of money on driving between properties and appointments. You can deduct
your mileage cost as business expenses. According to the Internal Revenue
Service, a vehicle can be claimed either as IRS standard mileage rate
or actual cost.
Standard mileage rate
includes business-related trips and all the parking & toll charges. Hence,
actual expense includes vehicle maintenance and repairs such as tire
replacement, oil changes, licenses, etc.
Home office deduction
If you are using a
particular area of your home for business work, you are eligible for a home
office deduction. It is just like a vehicle deduction that offers the regular
method & simplified options.
If you are living in a
high-cost area and have a large home office, it will help you to maximize deductions.
Hence, with the regular method, you can track actual expenses.
Record advertising and marketing costs
Most of the real estate
agents invest highly on advertising and marketing for business
growth. They spend a lot of money on business cards, flyers, and ads.
Do you know the promotion cost is also deductible? Yes, it is deductible
whether it is writing or designing fees for business’s advertising.
Online advertising is
becoming a vast area of spending. It includes website expenses, search engine
marketing, pay per click advertising and video production, etc.
Real estate software & apps cost
If you use software to
record and track your expenses such as CRM (customer relationship management),
QuickBooks, etc., all these are fully deductible.
The insurance, which you
bought for your business (business liability insurance or insurance for a
business property) is deductible. If you are running a home office, the
portion of your homeowner insurance is also deductible.
6. Office equipment & supplies
No matter that you
already taking home-office deductions, still, you can claim other
office-related expenses, which include computers, telephone & bills,
furniture, stationery, etc.
If you are using a
landline telephone for business, this expense is also deductible. But if you
are using mobile, you can deduct business percentage of that expense only.