Realtor Tax Deductions And Tips You Must Know: These tips will help you track your expenses and save more on taxes (2024)

February 5, 2024

Do you need a better tax plan? These realtor tax deductions and tips should help you get more organized for the coming tax year! See how realtors are... on

Are you prepared for taxes?

It’s never too soon (or late) to consider all the Realtor tax deductions possible! Have you been keeping tabs on all those coffees, gas miles, and other deductibles in order to save on your tax bill?I know I’ve been a bit lazy this year with my tracking.

To help us all out, I’ve reached out to some experts and compiled some ways to help you with your taxes this year and next year.

The first thing to understand is how to look at taxes as a business owner. Here’s a quote from H&R Block about big real estate tax questions:

What are the top tax deductions Realtors should be aware of when tracking their expenses?

A deductible business expense must be both ordinary and necessary. That means it must be common and accepted as well as helpful and appropriate for the trade or business. For Realtors, one of the more common deductible business expenses would likely be car expenses. They can deduct certain car expenses using either the actual expense method or the standard mileage rate of 56 cents per mile for 2014. If a Realtor uses part of their home exclusively and regularly for business, some mortgage, utility, tax and insurance expenses may also be deductible. For the second year, taxpayers can use a new and simpler calculation of $5 per square foot for a maximum of 300 square feet.

What method do you recommend Realtors (or small business owners) use to track their expenses?

Keeping good records is the foundation for everything else: a taxpayer can’t deduct what they haven’t documented. Good record keeping begins with tracking all income, saving receipts and documenting income and expenses. Having separate, business-only bank accounts will also make it easier to keep good records and file accurate tax returns. Finally, secure digital and paper records and back them up often.

These concepts are great to keep in mind when doing your taxes as a real estate agent. This is just the tip of the iceberg, however. There are so many other things you can consider as a business owner. One tip that I recommend to all real estate agents is:Find a real estate mentor. Mentors can take your business to the next level faster than anything else. Why?

Because, they’ve lived through the problems you are currently facing. When it comes to your taxes and deductions, they already have faced the questions you’re now asking. Find a mentor today; and follow their advice.

Realtor Tax Deductions Worksheet

Want our Realtor tax deduction worksheet?

Check it out right here:

One of the key strategies in getting better tax returns is starting New Years Day. Your tax strategy starts from day #1. Keep is simple and keep every single receipt for transactions starting today!

Find a way to compile all theloose documentation you currently have into one place.

Here are some ideas for staying better organized:

1) Evernote – For Realtor Tax Deductions:

You cannot deduct it if you can’t track it. Evernote is an easy way to keep everything in the same
place. You can take pictures of receipts or copy/paste email receipts directly into a folder.

Here’s a great video showing you all the possibilities of using Evernote to track your taxes:

2) Concur or MileIQ

The next thing to track when considering Realtor tax deductions is mileage. You’ll want to pay yourself mileage checks in addition to paychecks. This way you can write off the miles of your car.

These two applications let you keep a clean mileage documentation on your phone. The app tracks your miles as you drive them so you never have to play a guessing game at the end of the year.

These two tracking tools should help you stay on top of all the deductions you can use for your business. But what should you deduct?

Here are more Realtor tax deductions:

Accounting fees– Don’t forget that your accounting fees are tax deductible. When deciding whether to do your taxes yourself, consider how you can write off the cost of the accountant in your calculation.
Advertising –A cool thing to do with advertising is to pay with a credit card instead of your business debit card. If you pay the balance off at the end of the month, you’ll incur zero interest and can typically get 2% cash back!
Auto expenses– This is a big one! You need to be writing off the expenses of mileage on your car.
Banking fees – Does your bank charge you fees? You can write them off! (And them promptly changes to a bank that doesn’t charge fees.)
Business association membership dues – There are many fees Realtors have to pay to maintain their license. Be sure to track them all! Every time you join an association, put that invoice in your Evernote folder that tracks expenses.
Business travel– Did you travel to a convention? You can write this off!
Charitable deductions made for a business purpose – While this isn’t the best reason to donate to charity, this is a great perk.
Commissions to outside parties – Do you pay commission to your brokerage or a marketing team? You can write off these expenses.
Computers and tech supplies– Did you buy an iPad that you sometimes use for business? Be sure to track that in your Evernote folder for taxes.

Our List OfRealtor Tax Deductions:

Consulting fees
Continuing education
Conventions
Dining during business travel
Education and training for employees
Employee wages
Entertainment for customers and clients
Family members’ wages
Franchise fees
Furniture or fixtures
Gifts for customers ($25 deduction limit for each)
Health insurance
Home office
Interest
Internet hosting and services
Investment advice and fees
Legal fees
License fees
Losses due to theft
Mortgage interest on business property
Moving
Newspapers and magazines
Office supplies and expenses
Parking and tolls
Postage
Rent
Retirement plans
Safe-deposit box
Storage rental
Telephone
Utilities
Website design

How Taxes Really Work:

When it comes to running your own real estate business, you probably are setup as an LLC or sole proprietor. This means that the profit of the business is basically taxable.

But that also means a lot more of your personal expenses can be classified as such and thus lower what you pay.

All of these ideas are just the beginning. You should really sit down with a tax professional and sort through what expenses can save you the most when it comes to your tax bill.

Conclusion:

There are so many things you can do when it comes to Realtor tax deductions. The key is tracking and organizing all your files. Try Evernote and see if it doesn’t keep you more organized this month!

How do you track your expenses and deductions? Let me know in the comments!

Please note: I am not an accountant. Please consult an actual accountant when preparing your taxes. These are ideas to help you prepare for your taxes.

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Tyler Zey

Hey! I'm Tyler with Easy Agent Pro! We provide top notch marketing content for realtors... And we do it for FREE! I get excited about sharing tactics and strategies that can be implemented TODAY.

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