Go through your records to ensure that you don’t pay more than you need to at tax time.

Even the savviest real estate professionals can miss out on money-saving tax deductions. Many don’t even know or understand just how much money they can save.

Your rst step is to determine what you can write off. We’ve outlined some quick tips to make sure you get every deduction to which you’re entitled. Our advice is always to consult your accountant because there are rules that the Internal Revenue Service expects you to follow when taking these deductions.

MARKETING & ADVERTISING

This includes all promotional material:

  • Signage
  • Brochures
  • Direct mail
  • Fliers
  • 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

This includes anything you do that helps you become a better real estate professional:

  • 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 licenses and fees

CAR EXPENSES

There are two methods for deducting car expenses. You may either deduct your business mileage at 55.5 cents per
mile (you can still deduct tires and car washes when you take mileage) or you can keep receipts for all your vehicle- related expenses and deduct them directly:

  • Gas
  • Insurance
  • Car washes
  • Maintenance (repairs, tires, etc.)
  • Lease payments
  • Interest
  • Depreciation

BUSINESS TRAVEL EXPENSES

When it’s a business trip, most items are tax deductible, including these:

  • Airfare
  • Car rental
  • Hotels
  • Meals
  • Parking
  • Tolls
  • Public transportation
  • Tips
  • Dry cleaning and laundry

BUSINESS EQUIPMENT

Everything you use to help you with your business is tax deductible, including the purchase of and repairs for equipment such as the following:

  • Computers
  • Cameras
  • Cell phones or smartphones
  • GPS
  • Cameras and lenses
  • Video cameras
  • Cleaning equipment
  • Flashlights

HEALTH/LIABILITY INSURANCE & RETIREMENT

Any payments for health insurance are deductible, as well as your retirement expenses:

  • De ned bene t plan
  • Self-employment pension • Simple IRA
  • Solo 401(k) plan
  • E & O insurance

STARTUP EXPENSES

If you’re just starting out, make sure to deduct anything else relating to your organizational startup costs. As always, check with your accounting and tax professional to ensure that these items are truly deductible.

OFFICE EXPENSES

It’s best to double-check with your accountant to help you determine if expenses for the home office portion of your home are deductible. Many times, for real estate professionals, the home of ce deduction is not available. Possible deductions include these:

  • 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 card interest on business purchases
  • Calculators
  • Briefcases
  • Printers
  • Scanners
  • Maps
  • Lockboxes (locksmiths)
  • Tape measures
  • Staging items (furniture, rugs, decorative items)

GENERAL BUSINESS EXPENSES

  • Tax preparation
  • Legal fees
  • Bookkeeping and payroll fees
  • Bank fees
  • Employee wages
  • Clerical support
  • Sales assistants
  • Virtual assistants
  • Payroll and unemployment taxes

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
  • Inspection fees
  • Customer gifts (less than $25 per customer)
  • Concessions
  • Courier services and delivery fees
  • Finder or referral fees
  • Repairs for listed properties
  • Home warranties

 

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