Posted on: 17 August 2015
It is a shame that you don't ever get letters from the IRS that tell you about deductions that you forgot to claim on your tax return. This is especially true for realtors who spend a lot of money to make their business work. Ultimately, it is up to your accountant to make certain that you claim every single deduction that you can so that you can lower your tax bill and possibly even get some money back. To do this, though, it requires good record keeping on your part. However, at the same time, you need to know what records you need to maintain. Read on to learn a few tax tips that can help.
Deducting Auto Expenses and Mileage
Two of the biggest expenses that realtors run into each year are mileage and car maintenance. In order to make use of the IRS mileage deduction, you need to maintain solid records of mileage, oil changes, repairs and gas. However, this can become tedious very quickly with the amount of driving that you do.
Therefore, you may want to consider the standard mileage rate, which is 57.5 cents per business mile in 2015. By using the standard rate, you won't have to worry about airtight records regarding your auto-related expenses and mileage. However, to make sure you're saving the highest amount of money, you may want to keep as accurate records as possible so that you can compare.
Home Office Deductions
Whether you are renting or buying a home, your home office is an important deduction. It is often full of small deductions that you may not be aware of. For example, you can typically deduct a certain percentage of your rent, insurance, utilities and maintenance of the office area.
In order to claim the home office deduction, the IRS requires that the home office is used solely for your business. This can either be for regular meetings or where you do your work. If the home office is not used exclusively for business purposes and is used at any time for any other purpose, then you cannot claim the home office deduction with the IRS.
Some Commonly Overlooked Tax Deductions
There are some tax deductions that you may be missing out on, as they don't come to mind when you think about a deduction. Here are a few of them:
- Office Supplies – Every office needs some supplies, and this doesn't necessarily mean computer equipment. In fact, it can mean postage, magazine subscriptions, and anything else that is directly related to your work.
- Advertising – As a realtor, you do a lot of advertising. When you use money to do this advertising, you can deduct it.
- Car Expenses – Other than the obvious gas, mileage and repairs, you can also deduct tools and parking fees.
- Additional Expenses – Realtors often go the extra mile to make clients happy. This can include anything from tickets to the ballet or dinner. These are expenses that can be deductible.
Being a realtor can be rather expensive, but you can get a significant portion of that money back or at least save money on your tax bill at the end of the year with the aforementioned tax deduction tips. Speak to your accountant about further deductions and business tax preparation that can be taken to ensure that you maximize your tax return (or minimize your tax bill).Share