Are There Tax Deductions for Real Estate Agents?

Now that tax season is over; taxes are probably the last thing you want to think about right now. However, it’s never too early to start planning for the next year, especially if you suspect that you may have missed some valuable write-offs. The truth is that you’re not alone. Many people don’t realize that certain tax deductions apply to them. And tax season after tax season, they’re missing out and paying more taxes than they should. Here are tax deductions every real estate agent should know about and take advantage of:

Property marketing and advertising expenses

Costs involved in property photography, staging, and signages are tax-deductible, along with advertising expenses, such as online and newspaper ads.

Home office

Home deductions apply to you if you’re a real estate professional that uses a portion of your home to work exclusively on your real estate business.

Office supplies and equipment

Deductible office supplies include traditional office supplies like paper, pens, staplers, printer ink, and so on. But did you know the scope of office supplies can also include cleaning supplies, bathroom tissue, and storage lockers?

Software and business tools

Software that you use to run your business is fully deductible, including software and apps to generate leads, track expenses, automate marketing, and manage customer relationships, such as a CRM. This also includes cloud services, internet hosting fees, and website maintenance costs, which are considered office operating expenses.

Desk fees

Do you have a desk fee arrangement with a broker? Desk fees, also known as brokerage fees, are deductible. However, if you’re taking the deduction for desk fees, you won’t be able to claim the home office deduction.

Commissions paid

Do you pay employees or other agent’s commissions? These are considered fully deductible business expenses.

Education and training courses

Education and training courses that will help maintain or improve your skill in the real estate field are deductible. This includes registration fees and related materials. And if the training course requires travel, it may even include travel expenses.

Vehicle deductions

Each tax year, the IRS announces a Standard Mileage Rate for Business that taxpayers can use to calculate their auto-related deductions. To get the most out of a vehicle deduction, make sure to have accurate and complete Mileage logs.

Phone, phone bill, and phone accessories

It’s unlikely that you don’t use your phone to some extent to run your real estate business. Your phone, its accessories, and monthly bill are partially deductible.

Annual fees

Annual fees related to MLS, professional memberships, and state license renewals are deductible.

General business insurance

Insurance you buy specifically for your business is deductible, such as business property insurance or business liability insurance.

Health insurance

If you’re not eligible for an employer-sponsored healthcare plan, your healthcare insurance premiums may be deductible.

Did you miss out on any of these valuable tax deductions? Need help in making sense of which deductions apply to you? Contact us at 877-447-7529. We’re here to help Chicago taxpayers with their tax concerns and troubles.