Being a real estate professional offers some advantageous tax deductions that help to reduce your tax bill to Uncle Sam! However, real estate professionals have busy lives and sometimes miss some of these tax deductions at tax time. Why is that? Well, because your taxes aren’t on your mind every day throughout the year.
In an effort to help you, as a real estate professional, keep more of your hard-earned money, I’ve created this Tax Deductions Guide For Real Estate Professionals. By having this guide readily accessible, you can know which expenses are deductible as the year goes on. At the very least, it can help you organize your expenses by category (Or QuickBooks), so that your accountant can easily find your deduction totals.
How to read this blog article:
All tax deductions are broken out into their corresponding tax category listed out in alphabetical order.
It can also be used to input into their respective QuickBooks categories, so you can categorize these expenses as each year unfolds. These lists are not all encompassing, but provide a large amount of potential deductions.
Auto Expenses
o Maintenance
o Gas and Electricity Parking
o Lease Costs
o Car Washes
o Interest on Auto Loan (not the payment itself though)
o Tires
o Title
o Licensing
o Registration
o Depreciation
Business/Office Expenses
o Office Supplies: Calculator, Camera, and Lenses, Cellphone, Cleaning Equipment, Computer Equipment
o Repair
o Spare Keys
o GPS
o Hard Drives
o iPad or Tablet
o Lock Boxes
o Maps
o Printer
o Staging Items
o Measuring Equipment
o Client Refreshments (Coffee, Water, etc.)
o Copier Fees
o Cleaning Services
o Bookshelves
o Chairs
o Desks
o Filing Cabinets Envelopes
o Folders
o Paper
o Televisions
o Cloud Storage of Business Files
o CRM (Check out my post about CRM Systems)
o QuickBooks
o Other Business Software
Education and Training
o Training
o Mandatory Continuing Education
o Audible Subscription (if used for educational purposes)
o Real Estate Agent Books
o Online Courses
o Coaching Programs
Employees
o Transaction Management
o Family Wages (If you pay family member/children to help)
o Payroll and Unemployment (FUTA) Taxes
o Showing Assistant
o Real Estate Virtual Assistant
Home Office (Must be principle place of business)
o Insurance
o Mortgage Interest/Rent
o Property Taxes
o Repairs/Maintenance
o Security System
o Utilities
Insurance
o E&O Insurance
o General Business Insurance
o Private Health Insurance (talked about more later)
o Auto Insurance
Legal/Professional Services
o Tax Professionals
o Bookkeeping Services
o Legal Professionals
o Financial Planning Consulting Services
Licenses and Dues
o MLS Dues
o NAR Dues
o Association/Board Dues
o Brokerage Fees
o Desk Fees
o Royalty/Franchise Fees
o Chamber of Commerce
Marketing
o Listing Signs
o Listing Flyers
o Business Cards
o Website Development and Maintenance
o Social Media and Internet Ads
o Direct Mail
o Marketing Management Fees
Meals
o Business Meeting Meals (50%)
Sales Tax and Closing Costs
o Termite Inspection Feees
o Closing Attorney Fees
o Concessions
o Appraisal Fees
o Courier Service/Delivery Fees
o Finder Fees/Referral Fees
o Home Warranty
o Notary Fees
o Open House Expenses
o Staging Fees
o Photography
Self-Employed Health Insurance
o Self-Employed Health Insurance (100% Deductible for yourself, your spouse and dependent children)
Services and Fees
o Business Bank Fees
o Bookkeeping Fees
o Business Licenses
o Interest on Business Purchases
o Ongoing App Subscriptions
o Internet Service
o Cell Phone Service (% Based on business usage)
Travel (For Business Purposes)
o Airfare
o Lodging
o Meals
o Car Rental
o Ride Share
Wrapping Up:
As mentioned previously, this is not an all-encompassing list, nor will all of these expenses apply to every real estate professional. But, having worked with real estate professionals across the country, I see too many miss a lot of these deductions. Your CPA isn’t with you every day, so if these aren’t being tracked, then you aren’t saving the right amount on your taxes.
Use this list as your guide to tax savings on your 2022 tax return!
Disclosures:
Content in this material is for general information only and not intended to provide specific advice or recommendations for any individual.
The economic forecasts set forth in this material may not develop as predicted and there can be no guarantee that strategies promoted will be successful.
This information is not intended to be a substitute for specific individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax advisor.