Common tax deductions for real estate agent/brokers

Tax season officially starts in a few days (Jan 27th)! As an investor and/or business owner, do not be in a rush to file your taxes until you have gathered sufficient documentation to take advantage of the maximum deductions.

If you are a real estate broker/agent, here are some common tax deductions to keep in mind:

• Home office expenses – Applicable whether you rent or own your home

• Vehicle expense – Maintenance and repairs, gas, auto insurance, mileage, etc. Mileage to travel to properties is typically very high. Discuss with your tax professional whether the standard mileage rate method or the actual expense method is better for you

• Marketing – Costs to market properties before they are sold, costs to promote yourself to attract homebuyers and sellers

• Professional Development – Real estate training and education expenses

• License fees and dues

• Multiple Listing Services (MLS) dues

• Client gifts – There is a $25 deduction limit per client per year

• Staging – Agents who get hands-on with the staging process should keep track of these expenses

• Referral fees paid for introducing clients to your services

• Depreciation- Keep track of depreciation expenses for cars used to show properties, office equipment, office furniture, etc.

If you’re a real estate agent or investor, we can help you plan and structure your business to be tax -efficient. We are passionate about finding ways to lower your taxable income. Book an appointment at www.lobecpa.com and let’s strategize on your future!