Tax Tips: What to Deduct?

Posted on: February 18th, 2011 by
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Looking at today’s date I noticed that Income Taxes are due exactly 2 months from today. This year we will all file taxes on April 18th, due to the celebration of Emancipation Day in Washington D.C. on April the 15th.

I am sure that all of you have received your tax preparation documents, and it is now becoming time to sit down and fill out the papers. As many times as you file them, how can you be sure you are taking all the deductions you can?

Well, you could hire a professional to do your taxes and simply be lifted of the burden of the whole thing…or you could bite the bullet and learn what tax laws you can and cannot benefit from. Below are a few popular deductions to get your started this year.

Tax Deductions for Real Estate Agents:

  • Advertising Costs: Signs, newspaper advertising, flyers, online advertising, post cards, promotional materials, and anything else that was used to market your business may be deductible.
  • Professional Fees: Your MLS Board Dues, Realtor Dues, Renewal fees with your state board, Errors & Ommissions Insurance, and any other professional fees you incur may also be deductible.
  • Education Materials: Did you take continuing ed classes or seminars? Those may be deductible as well.
  • Car/Driving Expenses: This is an obvious one most agents remember,  but many often get confused about how much mileage they can deduct or how to separate personal and business use. Another confusing thing for many agents is deducting depreciation if you own your car or lease payments if you lease. You can choose to deduct per mile driven or you can also do the actual cost of insurance, gas prices, repairs & maintenance, and other vehicle expenses.
  • Office Equipment: Office equipment can include desk fees if you have them at your office, computer/software, phone fees (including cell phone), cameras, office supplies, and anything else related to necessities of running your office.
  • Wages Paid: Did you pay an assistant? Hire someone to help you? Did you pay out any referral fees to other agents? All of these may be deductible as well.
  • Business Entertainment: You can deduct fees for dinners, event tickets that are business oriented, entertaining for business at home, and anything else related to costs you incurred for entertaining business clients. Be careful with this one – be sure it was really for business before claiming it.

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