Even the savviest of real estate agents can miss out through money-saving tax deductions. Many don’t even know or understand just how much money they can save. You can quickly figure out how much you can save if you add up your total savings in federal and state taxes plus self-employment taxes.
Your first step is to determine what you can write off. We’ve outlined some quick tips to make sure you get every deduction you’re entitled to as a real estate agent. Our advice is always to consult with your accountant because there are rules the IRS expects you to follow when taking these deductions. Alternatively you can schedule a free 15 minute consultation with our tax specialist, click here.
Marketing & Advertising
This includes any and all promotional material:
- Signage
- Brochures
- Direct mail
- Flyers
- Business cards
- Billboards
- TV and radio ads
- Web design, hosting and domain fees
- Digital marketing costs (Google and Facebook ads, emails and online newsletters)
- Including any professional fees you pay to have someone perform marketing services.
Professional Development
Anything you do to that helps you become a better agent:
- Attending trade shows, conferences, seminars, workshops and sales training
- Subscriptions to magazines, trade publications, and newsletters
- Purchases of textbooks or reference books
Professional and Business Fees
As a real estate professional, there are a number of organizations you are required to join or that you use for networking that you can deduct as well:
- National Association of Realtors
- National Association of Independent Real Estate Brokers
- National Association of Real Estate Brokers
- National Association of Exclusive Buyer Agents
- Local Chambers of Commerce
- Franchise fees Professional and Business
- MLS fees Professional and Business
- Business licenses Professional and Business Fees
Car Expenses
There are two methods for deducting car expenses. You can either deduct your business mileage at 55.5 cents per mile (you can deduct tires and car washes when you take mileage) or you can keep receipts for all of your vehicle-related expenses:
- Gas
- Insurance
- Car washes
- Maintenance (repairs, tires, etc.)
- Lease payments
- Interest
- Depreciation
Business Travel Expenses
When it’s a Business Trip basically everything is tax deductible including everything below:
- Airfare
- Car rental
- Hotels
- Meals
- Parking
- Tolls
- Public transportation
- Tips
- Dry cleaning and laundry
Office Expenses
It’s best to double-check with your accountant or schedule a free 15 minute consultation call with Empire Tax Professionals to help you determine if your home office expenses are deductible, such as:
- Mortgage interest or rent
- Property taxes
- Insurance
- Repairs or Maintenance
- Security systems
- Cell phones and pagers
- Answering services
- Internet services
- Office phones
- Toll-free numbers
- Credit interest for business purchases
- Tax prep Office Expenses
- Legal fees Office Expenses
- Bookkeeping and payroll fees Office Expenses
- Bank fees Office Expenses
Business Equipment
Everything you use to help you with your business is tax deductible, including the repairs for the equipment and:
- Computers
- Cameras
- Cell phones or smartphones
- GPS
- Cameras and lenses
- Video cameras
- Cleaning Equipment
- Flashlights
- Calculators
- Briefcases
- Printers
- Scanners
- Maps
- Lockboxes (Locksmiths)
- Tape measures
- Staging items (furniture, rugs, decorative items)
Health/Liability Insurance & Retirement
Any payments for health insurance are deductible, as well as your retirement expenses:
- Defined benefit plan
- Self-employment Pension
- Simple IRA
- Solo 401K Plan
- E & O Insurance
Employee Wages
Make sure you maximize your deductions for employees such as:
- Clerical support
- Payroll and unemployment taxes
- Sales assistants
- Virtual assistants
- Family wages
Selling Expenses
Fees that you incur as a result of selling a property are also deductible:
- Appraisal fees
- Inspection fees
- Notary fees
- Open house expenses
- Photography
- Staging fees
- CL 100 fees
- Client gifts less than $25 per client
- Concessions
- Courier services and delivery fees
- Finder or referral fees
- Repairs for listed properties
- Home warranty
Start-up Expenses
If you are just starting out, make sure to deduct all fees above and anything else relating to your organizational start-up costs.
Disclaimer: Empire Tax Professional’s blog is a source for informational purposes of industry news and related topics. We make every effort to provide accurate and honest tax information, however this information is not a substitute for professional tax advice. Please schedule a 15 minute consultation with us here.