It’s important to know what you owe when and how you can reduce your tax bill as much as possible. Here are some deductions that will help you save money and focus on building your business.
Tax season is almost here. So, now is the perfect time to take a look at tax deductions you can – and should – be taking. Remember, most reasonable expenses and purchases related to your real estate business are tax deductible as long as they are necessary and ordinary. Are you eligible to take advantage of these deductions?
This is the deduction most commonly claimed by all small businesses. Any and all driving you do for your business (minus commuting to and from work) is tax deductible.
2. Office Rent and Utilities
If you rent commercial office space for your business, you may be eligible to deduct the costs of rent and utilities – this can really add up over the course a year.
3. Home Office Expenses
If you work from a fully dedicated home office, you may be able to take regular (percentage of home + actual expenses & records) or simplified (allowable square footage up to 300 sq. ft. @ $5 per sq. ft.) deductions.
4. Business Supplies
This includes the costs of everyday business supplies such as ink, paper, postage, paper clips, folders, binders, pens and pencils.
5. Legal and Professional Services
The fees you pay on behalf of your business to a wide range of professionals – from attorneys and accountants to contractors and design consultants – are all tax deductible.
6. Advertising Expenses
You can deduct the amount you spend on advertising your business. This deduction covers a broad range of expenses such as newspaper/online ads, photography, home staging, brochures and open houses.
7. Charitable Giving
Donating to charities and non-profits is worthwhile, and these contributions are also tax deductible.
8. Membership Dues
You may deduct the costs of joining or maintaining membership in a variety of real estate associations and professional groups.
9. Meals and Entertainment
In most cases, you may deduct 50% of the expenses associated with a meal or entertainment event at which business is discussed with clients, employees, vendors and other professional contacts.
10. Business Travel
When you travel out of town for business, airfare (or other transportation costs) and hotel expenses are fully deductible. Please note that you may only deduct 50 percent of meal expenses, however.