As a real estate agent, taxes can be one of the biggest challenges you face. Unfortunately, it’s extremely easy to miss out on deductions and thereby add unnecessary overhead to your annual revenues.
3 Tips for Handling Real Estate Agent Taxes
Fortunately, there are three very simple easy tips you can implement right away to save on your real estate agent taxes.
1. Track Your Mileage
Although the work is associated with homes, a lot of what you do as a real estate agent happens behind the wheel of your car as you drive from one showing to the next.
While it’s always advisable to mind the road, you should also keep track of how far you’re driving on it. That’s because, as long as it’s in service of your job, that mileage is a business expense you can deduct.
This is actually just one of a number of motor vehicle expenses the Canada Revenue Agency (CRA) will allow you to deduct. Other examples include:
- Fuel
- Insurance
- License and Registration Fees
- Maintenance Costs
You can even deduct the eligible interest you paid on any loans used to buy your vehicle. The same goes for leasing costs.
2. Record the Office Supplies You Buy
Everything from pens and pencils to paper to printers to your ink cartridges and more all qualify for deductions, as well.
Basically, any supplies you need to do your job are deductible from your real estate agent taxes.
This even includes things like industry magazines or subscriptions to specific online services that help you improve your real estate agent business.
Also, don’t forget about the electricity you rely on to – literally – “keep the lights on.”
Assuming you’re self-employed and have a home office, the allotment of electricity for that room is deductible. The same goes for other work-at-home expenses like insurance, maintenance, and heating.
Just be sure you save your receipts for these purchases as they may otherwise be difficult to prove in case of an audit by the CRA.
3. Keep a Record of Client-Related Costs
Securing clients can be a lot of work. Often, that work can be fairly expensive, too.
The good news is that a lot of those business expenses are deductible. This even includes the money you spend on meals and entertainment. You can deduct 50{9de21fd12e8ca6488972186bbb5fe81becd95b7b490974f1f8badcf668439b39} of the amount you spent or the amount that would be considered reasonable for those circumstances.
By the way, those deductions even apply to meals you eat by yourself when at conferences, conventions, or similar events related to real estate.
Benefit from Expert Accounting Help
If you need help with your accounting because you’re a real estate agent, contact us today. At Padgett, we specialize in helping small business owners like yourself make sure their taxes are done right, including making every deduction they’re entitled to.
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