Tax Tips for Real Estate Agents: 6 Things to Track This Year

As the current tax season approaches, it might seem too early to be thinking about next year. But as of January 1st this year, the next tax period has already begun. We gathered some top tax tips for real estate agents that focus on things to keep track of throughout the year. Organizing all the receipts, invoices, and other records related to your business activities will help make filing next year’s taxes easier. Your accountant and tax advisor will surely thank you, too!

Business Receipts

All the things you purchase to effectively run your business and produce income are potentially tax-deductible. Track your brokerage dues, MLS fees, marketing expenses, office supplies, and even those expenses related to your professional development. Each business expense is a potential offset to your income, meaning you can keep more commission in your pocket.

Business Travel & Mileage

Real estate agents travel frequently, from client meetings and property showings to open houses, industry events, and more. Keep a record of every business-related mile you travel. This includes travel by your own car, ride-share services, planes, and trains; as long as it is for business purposes. Don’t forget the receipts for parking and toll fees — those can add up fast!

Phone & Internet Usage

Keep tabs on your phone minutes and internet usage — every business call, market analysis, and property search counts. If you use your phone and internet for both business and personal use, then you’ll need to separate this usage (typically by a percentage). It may seem tedious, but you’ll thank yourself when your detailed record helps you get the maximum allowable deductions.

Office Space Expenses

Whether you rent office space somewhere or work out of your home, that has the potential for tax savings, too. For rented spaces, tracking and reporting expenses is fairly straightforward. For home offices, scrutinize your monthly mortgage (or rent), utilities, insurance, and maintenance costs. A portion of each may be deductible if you meet certain criteria.

Meals & Entertainment

Wining and dining clients isn’t just good for your business—it’s good for your taxes, too. Hang on to your receipts from meals with clients and other business partners, and from attending industry events. You may even be able to write off a portion of the entertainment expenses from events that you host for clients. Be sure to note how much of the event was for business versus entertainment.

Donations & Volunteer Work

Being generous is admirable and a wonderful way to support your community. It’s also a smart tax move. Keep track of charitable donations, whether they’re monetary gifts or out-of-pocket expenses related to volunteer or pro-bono work. Remember, there is a limit on deductible donations, and they must be gifted to a qualifying organization.

These tax tips for real estate agents are meant as a guide to help ease the stress of tax season. You should always consult a financial advisor or tax professional who can help you determine which deductions you’re eligible for to achieve maximum tax savings. It may seem like micromanaging yourself, but the more detailed records you keep, the better for your financial advisor and your tax return. Square Foot Photography helps make that easier for you. Just ask us for a summary of your invoices for the year!

*Square Foot Photography and its affiliates do not provide tax, legal, or accounting advice. This material has been prepared for informational purposes only and is not intended to provide, and should not be relied on for, tax, legal, or accounting advice. You should consult your own tax, legal, and accounting advisors before engaging in any transaction. For more information, visit irs.gov