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Tax Deductions for Real Estate Agents

Tax Deductions for Real Estate Agents

Tax deductions for real estate agents can help you reinvest in your business. Most real estate agents don’t understand all the things they can write off to save them taxes. They often overlook the simplest items that are deductible in the course of their business activities. You do a lot more than just list and sell properties. You advertise for your clients, protect the home while it’s being viewed, show the seller how to give their home more curb appeal, and help buyers find that perfect home to create long-term memories of their family. All this can lead to bigger tax deductions.

Even the smallest expense done several times of over several years can save you hundreds if not thousands of dollars. You can also plan your business to take advantage of every possible deduction. Some tax deductions for real estate agents to consider are:

Auto Travel

Your auto expense is based on the number of qualified business miles you drive. Expenses for travel between business locations or daily transportation expenses between your residence and temporary work locations are deductible; include them as business miles. Expenses for your trips between home and work each day, or between home and one or more regular places of work, are commuting expenses and are NOT deductible. Document business miles in a record book as follows: (1) give the date and business purpose of each trip; (2) note the place to which you traveled; (3) record the number of business miles; and (4) record your car’s odometer reading at both the beginning and end of the tax year. Keep receipts for all car operating expenses- gas, oil, repairs, insurance etc.-and of any reimbursement you received for your expenses.

Out of Town travel

Expenses accrued when traveling away from “home” overnight on job-related and continuing education trips are deductible. Your “home” is generally considered to be the entire city or general area where your principal place of employment is located. Out-of-town expenses include transportation, meals, lodging, tips and miscellaneous items like laundry, valet etc. Document away-from-home expenses by noting the date, destination and business purpose of your trip. Record business miles if you drove to the out-of-town location. In addition, keep a detailed record of your expenses- lodging, public transportation, meals etc. Always list meals and lodging separately in your records. Receipts must be retained for each lodging expense. However, if any other business expense is less than $75, a receipt is not necessary if you record all of the information in a timely diary. You must keep track of the full amount of meal and entertainment expenses even though only a portion of the amount may be deductible.

 

Tax attorney - Miami and West Palm Beach Florida. I graduated from the #2 tax school in the US. My over twelve years of entrepreneurial experience will help you make the right decisions for your business. Do you have an IRS tax problem? Let's talk today. Your tax options may change tomorrow.

My blog posts are NOT LEGAL ADVICE. They are for informational purposes only. Actual legal advice can only be provided after you have signed an engagement letter. This information does not create an attorney client relationship. Without attorney client privilege you could divulge information that can hurt your legal rights in the future. I can answer your tax questions in person in Miami and West Palm Beach Florida.