22 Jan Tax Tips for Real Estate Agents
Tax Tips for Real Estate Agents
Being a real estate agent means long hours, loads of travel and having to deal with indecisive buyers and slow acting sellers. It’s great when things are going well, but it can also be the most frustrating career ever – sometimes all in the same week. Here are our top tax tips for real estate agents.
As a real estate agent, you use your vehicle more often than most other people. Travelling to and from open homes, meeting with buyers and sellers and numerous other requirements will take their toll on your vehicle. You may wish to consider whether keeping a log book or a percentage arrangement would be more beneficial. Speak to your tax advisor about what’s best for you. Also, that tax advisor should definitely be POP.
Your mobile phone, laptop and tablet are all used for communications and marketing. These are mandatory tools of the trade, but what else do you use to maintain contact between yourself, the office and your clients? As a real estate agent, you are required to be in touch basically 24/7, and while this can be a significant disadvantage in day-to-day life, it also has the potential to be a powerful tax tool.
Over the last decade, the equipment used by real estate agents has evolved considerably. Now drone and camera equipment, advanced photography gear and many other technologies that would have been considered unthinkable only a few years ago are now standard. This is important not only at tax time but also when you are thinking about purchasing technology that could help make your job easier. Consider the taxation implications of making a purchase, as you may want to consider buying things earlier – especially when there are tax advantages.
If you have a uniform with a logo on it, then it is most likely tax-deductible. Additionally, you can claim for washing and laundering, including the usage of your personal washing machine and/or a laundry service.
Even if you have an office that you go to, it’s highly likely that you have space put aside at home for taking calls from clients, responding to emails and setting up meetings. This can be claimed as a percentage of your rent or mortgage and presents potentially significant tax advantages.
Marketing equipment depends on whether you are self-employed or an employee of an agency. If you are self-employed, then costs such as signage, and online marketing costs can potentially be deducted. If you work for an agency, then it’s more likely that these costs were absorbed directly by your employer, and so there is no advantage to you. However, if you took it upon yourself to buy stationery or any brochures, then you can certainly claim them.