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Managing your finances and taxes as a real estate agent can oftentimes be a challenging task. With various expenses, taxes, and other daily expenditures, at the end of the month, saving money and managing taxes can become quite hectic. However, being a real estate agent, there are several hidden tax write-offs or tax savings that you should be aware of. These tax savings can help you reduce the overall burden of taxes that are owed to the IRS. With these tax savings, your finances and taxes are bound to be better organized and in the end, benefit you financially. So let’s get started!
1. Special COVID-19 Deductions
2020 presented some unique challenges. Many of us had to conduct business completely differently than how we may have done so in the past in order to stay open and stay safe! Below are some expenses you may incurred as a result of operating your business during the COVID-19 Global Pandemic:
Personal Protective Equipment (PPE) such as gloves and masks for yourself, employees, and/or clients
Hand sanitizer and other cleaning supplies for open houses
Video Conferencing Web Software Fees (Zoom, MS Teams, etc.) for meetings with clients and/or staff
Home Office Expenses
2. Licenses, Insurance, and Fees
Another tax deduction that real estate agents can claim are for the expenses made towards annual license costs, insurance, memberships, and other fees. The fees that you pay for your state license renewal, MLS dues, and any other professional memberships can be deducted from your payable taxes and save you money.
3. Advertising and Marketing Expenses
Any form of advertising that you pay for is also a tax-deductible. Whether you pay for online and digital marketing or you pay for other marketing materials like mailings, banners, or posters, all these expenses can be written off on your taxes.
4. Education and Training Expenses
With the real estate industry evolving and changing, educating yourself and maintaining an edge is necessary. And what’s better is that all the expenses you make towards your education and training are also tax-deductible. One place where you can enhance your skills and reach your full potential is right here at Skyline School of Real Estate. Here, you can learn and enhance your knowledge by taking up various classes. Developing yourself and maximizing your potential as a real estate agent has never been easier. We offer Live Online and Self Paced classes so you are sure to find something to work with your schedule. Ready to take your career to a new level?
Click here to sign up for a class today!
5. Desk Fees
Another tax-write off that you can claim as a real estate agent is the expenses made towards desk fees. Whether you are an independent broker or you’re associated with a national franchise, the desk fees that you pay are tax deductible.
6. Referrals
The referral commissions that you pay as a real estate agent to other agents that you work with are fully deductible business expenses and tax write-offs. This is a great way to save taxes as referral commissions are a major part of the real estate industry, and all these commissions that you pay are fully deductible tax savings.
7. Office Supplies and Equipment
Office supplies, stationery, and computer equipment are common expenditures for real estate agents. But, did you know that these office expenses are fully deductible business expenses that you can claim with tax savings? So, all the purchases you make for managing your office like stationery and other equipment can be deducted and are tax savings for real estate agents.
8. Software and Business Tools
While managing your real estate business, any software or productivity tools that you use are also tax deductibles. Software like a CRM or automation marketing software are fully deductible tax write-offs. Technology and modern software can help real estate agents optimize their business and simplify the entire process. So, with the added benefit of tax write-offs on any software that you purchase, one should definitely make use of modern software and tools to enhance productivity.
9. Phone and Internet Expenses
Other expenses that you can claim in tax write-offs are your phone and internet bills. Managing your business as a real estate agent involves making a lot of phone calls and using the internet. So, all the expenses made towards your phone bills and internet connection are fully deductible tax savings.
Now, with the knowledge of all these tax savings for real estate agents, you can manage your taxes efficiently and reduce your overall tax burden. The journey of becoming a successful real estate agent takes time and dedication, but with the proper resources and knowledge, you can definitely succeed in your career. The more successful you become, the more complicated your taxes will get. Make a point of keeping up with all your expenses and you will be primed for success.
Disclaimer: These tax write-offs have been listed after proper research and due diligence. However, this does not substitute as advice from a CPA, Tax Attorney, or other tax advisor. We would advise you to consult your tax advisor regarding your individual tax situation.