5 Realtor Tax Deductions That You Should Know About
For many busy real estate agents, managing your finances can be one of the most challenging things to stay on top of. The truth is real estate agents have many different expenses that end up eating up a significant portion of their profits. And it may be something that you’ve been worrying about now that another year is in the books and tax time is upon us again.
But there’s some light at the end of the tax tunnel, thanks to being able to claim several of your significant expenses on your taxes as business-related costs.
Your friends at Maggi Tax want to share with you five tax deductions for realtors that you may not yet know about. This way, you can recoup as much of your profits as possible when filing your 2021 tax returns.
Here are the five most common tax deductions that you should know about.
Advertising And Marketing Costs
Advertising is a significant part of your real estate business from signs, ads, business cards, or flyers. It’s all able to be deducted from your taxable income. Marketing production costs can also be deducted, including design and writing fees, website design and hosting fees, SEO optimization services, pay-per-click advertising, and video production costs.
Depending on your office setup, you may be able to deduct your desk fees. This is especially helpful if you’re working with an independent broker or even under a national franchise and you pay for a brokerage desk fee. However, be aware that if you deduct your desk fee, you cannot claim a home office on your taxes.
Fees, Insurance, Memberships, and Licenses
Yes, these can be deducted as well. All your professional membership, state license renewal, and other annual fees, along with your MLS dues, are deductible on your taxes. Even your general business insurance and Errors and Omissions insurance are deductible, and any kind of real estate taxes are necessary for your business operations. But be aware that you cannot deduct any membership dues affiliated with political advocacy or lobbying.
Meals And Entertainment
Taking your clients out to dinner is a big part of your job as a realtor, and sometimes it’s what it takes to close a deal. Meals with clients and business travel provide you with the ability to deduct 50 percent of your total meal and/or travel expenses. However, if you have a well-advertised open house that is open to the public, you can deduct 100 percent of the cost of food and drinks.
Anything from coaching, trade shows, classes, conferences, continuing education courses to industry gatherings are all deductible as a real estate agent. And if you’re traveling to any of these events, you’re able to make deductions for your accommodation and transportation costs.
When you’re preparing taxes for your real estate business this year, be sure to keep these five realtor tax deductions in mind. And if you want help navigating the many other realtor-specific tax deductions this year, be sure to call the friendly and expert tax professionals at Maggi Tax. No matter how big or small your real estate business is, we have the experience and real estate tax law knowledge to ensure you get the most back on your return. Call us today at (813)-850-0131.