Tax Write Offs for Real Estate Agents to Save Money
Tell me if this sounds familiar… You’re approaching the end of a great year and suddenly it hits you – Uncle Sam is going to take a big bite out of your income come April 15.
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So what do you do? In order to meet their financial goals, many real estate agents begin scrambling to spend some money in search of some needed real estate tax deductions.
But even in bulk, Post-It Notes and other office supplies won’t add up to make much of a noticeable difference when it comes to real estate tax write-offs.
So here are five wise big-ticket items you may want to consider that will drive your life and business forward and reduce your tax burden.
Before we dive in, I have to give big thanks to Toby Mathis, partner at Anderson Advisors for helping ensure this blog is accurate as of press time. Because tax laws change frequently, we’d strongly suggest you check with Toby or your tax consultant prior to acting on this information.
Real Estate Tax Write-Offs
Real Estate Coaching
Having a coach in your corner will help you stay disciplined, focused on what matters most, and on track to achieve your goals.
If you’ve ever asked yourself “Is real estate coaching a tax write-off?” – you bet it can be! Real estate coaching can potentially be one of the best tax write offs for real estate agents, but it depends on several factors. In general, if the coaching is directly related to your real estate business and helps you improve your skills, knowledge, or performance in a way that benefits your business, it may be deductible as a business expense. Every cent of your coaching investment can be included in your real estate tax write-offs against your income.
Having a dedicated coach doesn’t come cheaply, but the best coaching companies stand behind their services with some sort of performance guarantee to take your business to that “next level.”
Health Insurance
Health insurance is one of the biggest expenses for any individual or family, and as an independent real estate agent, it’s likely you don’t have access to a company plan to save you money.
However, as a self-employed independent contractor, you can deduct your health insurance costs as a tax write-off!
As long as you haven’t opted out of an employer-sponsored plan, you should qualify for the write off.
Legal & Professional Services
As a business owner, you have many responsibilities that you COULD handle yourself, but you’re better off putting those tasks in the hands of a true professional. (Much the same way you’d advise a homeowner not to go FSBO.)
And thankfully, many of those services are tax deductible!
I’m talking about your accountant, your attorney, business consultants, a financial planner and so on.
If you’re taking advantage of these services, be sure to also take advantage of the tax write-offs for what you’re paying them.
Marketing Expenses
Have you ever conducted a marketing audit of all the marketing pieces you use? All you have to do is lay everything out (don’t forget to print out some of your digital ads and social media posts) in front of you and ask yourself one question:
Does this all look cohesive? Or is my branding a complete mess?
Point being… many real estate agents fail to ever take the time to have brand marketing materials professionally created for them.
But guess what? If you do, the cost is tax deductible.
If your marketing audit raises more questions than it answers, you might just consider reaching out to a personal branding expert to establish some much-needed continuity.
Or maybe it’s time to order more yard signs or pop-by presents as last-minute efforts to increase your write-offs.
Training Events & Courses
The best agents are always adding to their toolbox, expanding their knowledge base and devoting time to working “on” their business as opposed to the daily grind of working “in” it.
Learning doesn’t happen in a vacuum, though. You’ve got to seek out those learning opportunities. Attending powerful training events and investing in online training programs are two tax-deductible ways to keep yourself informed and growing.
How many training events will you attend in the next 12 months? What courses do you need to increase your skills so you can grow your business?
Hopefully this blog provided some food for thought when it comes to real estate tax write-offs. As we mentioned earlier, while this advice is believed to be true as of press time, tax law varies from year to year and state to state, so we advise you to check with your tax professional prior to taking any action.
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