Tax season can be stressful, but you want to make sure you’re getting every deduction possible.
Claiming expenses helps you save money because it reduces the total income that you’re paying taxes on, meaning your taxable income is much lower and so is the total you owe the IRS.
So what expenses qualify as tax write-offs? For starters, it must be considered ordinary within the real estate industry and necessary for the advancement of your business.
Here are a few expenses you should be able to deduct on your taxes:
1. Software and Business Tools: If you use lead-generation services, such as CRM software, or products that help track mileage and expenses, these tools may be fully deductible.
2. Health Insurance: Many real estate agents are responsible for their own health insurance. A little silver lining here: That expense is tax-deductible.
3. Membership and License Fees: This includes state license renewal and costs for professional organizations like your NAR membership and MLS dues.
4. Contract Labor: If you employ an assistant or other professional helper, you can deduct that expense.
5. Publications and Subscriptions: Industry magazines, online publications or similar should be deductible. (Remember: This doesn’t include publications that aren’t related to your career.)
6. Training and Education: If you take courses to maintain or improve your skills specifically in your field of real estate, you may be eligible to write off associated costs, supplies and travel expenses.
7. Transportation: Business-related mileage is deductible, as are associated fees, including tolls and parking — as long as they haven’t been reimbursed.
8. Marketing and Advertising: Expenses for home staging, photography, marketing tools and signage may be deductible. With the vague requirements for this category, you may be able to include a variety of other items, such as gifts and shipping costs.
Want to learn about more ways to maximize your earnings? Get in touch today.
