Tax season is difficult for everyone. For those working as independent real estate agents, things can be even messier. If realtors are aware of these 12 tax deductions, their lives will be much easier when tax time comes around. Take a look at a few tax deductions that will help to save some money.
Vehicle Mileage
Much of a realtor’s time is spent driving clients to and from properties. Realtors in the United States alone drive billions of miles each year. Vehicle mileage is deductible as long as date, time, distance, and purpose of the trip are logged. The IRS determined the 2018 mileage rates to be 54.5 cents for every mile of business travel driven. By multiplying the total miles driven by the mileage rate, one can determine the deduction.
Home Office Deduction
If you have a designated office in your home, you can deduct up to 300 square feet in taxes. The prescribed rate of $5.00 must be multiplied by the square footage of the office. Writing off a home office also takes rent, mortgage, furniture, and other expenses into account. See more on simplifying home office deductions here.
Entertainment, Meals and Gifts for Clients
Taking clients out for lunch to discuss business and dining out on business trips are both acceptable to write off up to 50% if business was the proven highlight of the meal. Keeping track of receipts and other information is crucial, so don’t forget to log your business expenses!
Marketing Materials/Advertising
Traditional forms of advertising such as business cards, yard signs, flyers, and letterhead, as well as digital forms of advertising are all tax deductible.
Uber/Taxi/Lyft Fees
Showings in the city can be a hindrance if you are driving and parking your own vehicle. To save time and money, realtors often use other means of transportation to get their clients to and from different properties.
Office Supplies
Realtors can write off office supply purchases that range from decorations to paper clips.
Desk Fees
The payment agreement between a realtor and his or her broker is deductible. Keep in mind that either the desk fee or the home office fee can be deducted, not both.
Legal or Professional Services
Realtors can deduct any professional service that they hire to make their lives easier, whether it be a law firm, marketing agency, or an accounting firm.
