Tax deductions for REALTORS

A hectic fall market followed by a crazy spring season, and now it is now tax time. There’s just no rest for the weary when you’re a Realtor! Hopefully, you’ve been able to keep up with your mileage and receipts because it’s time to take stock of all of your deductions. To make it a little easier, we’ve compiled a handy checklist for you here. Keep in mind, we’re Realtors, too – not tax professionals – so do verify that all of your intended deductions are allowable for your circumstances before you send those forms to Uncle Sam.

Allowable deductions

If you’ve spend money on your business, it might be deductible. Business expenses are deductible if they are:

·         ordinary and necessary;

·         directly related to your business; and

·         reasonable in amount.

As the tax filing deadline looms, don’t forget to review all of the possible deductions that are available for real estate agents. Remember, as a self-employed individual, you could shave quite a bit off your 2015 tax bill.

First, take a look at your health insurance premiums. If you provide your own (and don’t rely on an employer or a spouse’s employer’s plan) your premiums could be 100% deductible.

Next, consider your accounting fees. If they’re connected with your business or if you’ve installed a new accounting system, they could be deductible. Similarly, attorney’s fees related to your business may also apply.

If you’ve spent money advertising your business, bought business cards, spent money to create presentations or hold open houses, you might be able to add those into your calculations. Small business gifts (under $25) and website fees are eligible.

Your car can be a big source for deductions as well. You can only deduct that portion which was used for business, so If you use your car 50% of the time on your business, you can deduct 50% of your expenses related to your car . Remember, this includes things like taxes, insurance, maintenance, mileage, gas, interest, car washes, and parking. Pretty much anything you spend money on in relation to your car for business.

Speaking of travel, if you’ve spent time at a convention, or done other business travel, consider adding lodging and travel expenses to the pot. Meals, entertainment, newspapers, and magazines may all be deducted. And while you’re thinking about that great TAR meeting from last fall, don’t forget to deduct professional memberships to your associations and chambers of commerce.

Once you’ve returned home, make sure to look at your office expenses. From rent to utilities, supplies, cleaning and maintenance may all be legitimate claims. So can phone, security and interest expenses.

Of course, you’ll want to have a professional tax preparer go over all of these items with you (and more). And don’t forget to sign up for the class Your Taxes and You, offered three times in March through MetroTex. Just like all of our CE classes, it’s tax deductible!