It’s tax season! We sat down with tax expert David B. Korcz, CPA to gather some great Tax Tips for all of our realtor friends! Here’s what he had to say;
Happy New Year Realtors!
As the calendar turns over many realtors and small business owners begin the ominous and daunting task of assembling and summarizing their business deductions to give to their accountant.
Here is a checklist of common expenses for real estate agents and brokers that you can use to make sure you don’t miss any deductions this year. Please use this as a guideline/memory jogger. If you have an expense that is not listed here write it down and ask your accountant/tax preparer:
• advertising expenses, including websites, mailing lists, newspaper advertising, fliers, online advertising, postcards, promotional materials, logo clothing, social media marketing and anything else you pay for to market your real estate business;
• bookkeeping, accounting and legal fees;
• business gifts (up to $25 per donee);
• business meals and entertainment (only 50 percent deductible);
• cab fares for business travel;
• car and truck expenses, including business mileage, depreciation, insurance, interest on car loans, lease payments, license plate fees, parking expenses, repairs and maintenance and tolls; (either the federal standard mileage rate or the actual cost to operate the vehicle)
• cell phones;
• computer software;
• computers;
• desk fees;
• Commission splits with other brokers/agents (be sure to get W9 form if you are going to be paying them over $600 and be certain to prepare their 1099-MISC forms)
• education to maintain or improve required skills (but not courses you take to pass the real estate licensing exam);
• home office expenses (if you qualify);
• insurance, including health insurance, errors and omissions insurance, business liability insurance, and business equipment insurance; (not life insurance or disability)
• interest, such as interest for business loans, interest paid on business credit cards;
• Internet access fees;
• map books;
• office equipment (cost may be deducted in one year using bonus depreciation or IRC Section 179);
• office expenses, including rent, cleaning and maintenance, and utilities;
• office supplies, also printing and copying;
• postage or other shipping fees;
• professional dues and fees — for example, multiple listing service dues and dues paid to the local Chamber of Commerce, Realtor associations, and real estate license renewal fees;
• referral fees and commission rebates;
• retirement plan contributions;
• subscriptions to professional journals and magazines;
• real estate franchise fees;
• taxes, including payroll taxes for employees, state and local business taxes;
• telephone service fees;
• travel to business conventions, including transportation, lodging and food;
• wages and benefits paid to employees.
The article above is meant as a guide to potential deductions that can be taken by realtors. If you have questions specific to your tax situation, please reach out to David B. Korcz, CPA at dnakorcz@optonline.net for further personalized guidance.
