A lot of Real Estate agents are often confused about what tax deductions they can take. Many agents make the mistake of not taking enough deductions, which can save you hundreds if not thousands of dollars. At the same time, you’ll want to make sure you’re really eligible for these deductions just in case you were to get audited – so be sure you are clear about what tax deductions you can take, and of course if you have any questions, speaking to your accountant or a tax professional is never a terrible thought!
Here are Some Common Tax Deductions for Real Estate Agents:
Advertising Costs: Signs, newspaper advertising, flyers, online advertising, post cards, promotional materials, and anything else that was used to market your business may be deductible.
Professional Fees: Your MLS Board Dues, Realtor Dues, Renewal fees with your state board, Errors & Ommissions Insurance, and any other professional fees you incur may also be deductible.
Education Materials: Did you take continuing ed classes or seminars? Those may be deductible as well.
Car/Driving Expenses: This is an obvious one most agents remember – but many often get confused about how much mileage they can deduct or how to separate “personal” and “business use”. Another confusing thing for many agents is deducting depreciation if you own your car or lease payments if you lease. You can choose to deduct per mile driven or you can also do the actual cost of insurance, gas prices, repairs & maintenance, and other vehicle expenses.
Office Equipment: Office equipment can include desk fees if you have them at your office, computer/software, phone fees (including cell phone), cameras, office supplies, and anything else related to necessities of running your office.
Wages Paid: Did you pay an assistant? Hire someone to help you? Did you pay out any referral fees to other agents? All of these may be deductible as well.
Business Entertainment: You can deduct fees for dinners, event tickets that are business oriented, entertaining for business at home, and anything else related to costs you incurred for entertaining business clients. Be careful with this one – be sure it was really for business before claiming it.
Whether you choose to have your taxes prepared by a tax professional or file online, hopefully these tax deductions for real estate agents will help make filing your taxes simpler.