Whether you are new to the real estate world or you’re a real estate pro, these five tax tips can help you save big going into tax season.
By following these tips, you can rest assured knowing you are saving all you can.
- Business Travel
For realtors, travel is always a part of the job. Whether the locations are close to home or across the country, the cost of traveling adds up quickly. You can add your business travel into your expenses, including any food and lodging that you require for a business trip. However, you can only claim a 50 percent deduction on the cost of meals when on a trip.
- Commissions Paid
The IRS states that any business that pays commissions are usually under fully deductible business expenses. This includes receiving and paying commissions to employees or business partners. Any commission paid to your brokerage or a marketing team is also included in this deduction.
- Office Rent and Utilities
Office rent is often one of the biggest expenses for a small business. Office rent is a tax deduction, including any common area maintenance charges that landlords pass on to clean the offices. If you have a dedicated space for a home office and it is your primary workspace, you can be eligible for the home office deduction.
- Software and Business Tools
In order to stay competitive, you might need to upgrade your technical equipment. Your cellphone, computer, software and any other office supplies fall under this category. This means that you can deduct the purchase price of any of the above-mentioned business equipment. By doing this, you can recover the actual purchase price of your business equipment over the years.
- Marketing and Advertising Expenses
No matter your business, marketing is crucial to gaining popularity. This can include any money spent on open house signs, flyers, business cards and mailers. Also included in this is any money spent on digital advertising such as website development, running ads on Google or on any social media platform.
It is important to know which tax write-offs are applicable to the real estate world. These five tax tips will help to ensure that you save money when tax season begins.