The year is winding down, and before you know it, tax season will be here once again.
If you're a real estate agent, you may want to start preparing for April now so that you can ensure you only pay the minimal amount of taxes at tax time.
Tax time also happens to be in the Spring, one of the busiest times for real estate agents.
The following are a few tips that you may be able to take advantage of to lower your overall tax burden and increase your tax deductions.
1. Car Expenses
No matter what profession you're in, everyone has to have a car to get them from point A to point B.
This is especially true for real estate agents, who are constantly on the move in order to showcase the latest house that's available for purchase.
All the driving that you do for your work is tax deductible. This includes the cost of maintenance, gas and other car-related expenses.
Be sure to have all your receipts so that you can maximize your deductions at tax time.
2. Office Supplies
Every real estate agent needs a home base to settle in. But you wouldn't be able to get much of your work done without supplies, be it pens and pencils, paper, stationery or electronics.
Virtually every office-related supply is tax deductible, even for magazine subscriptions that provide you with the information you need to do your job better.
3. Utility Payments
Many real estate agents are self-employed, typically having an office set up in the home. If you're one of them, the electricity you pay monthly to power your office is tax deductible.
Be sure to have a track record of all the utility bills you've paid in the past year so that you can claim it on your 2014 tax returns.
4. Long-Distance Travel Costs
It's said that all real estate is local, but brokerage meetings or training may have taken you to other parts of the country.
Most of the expenses that you paid for on your trip are tax deductible, such as the cost of airfare, hotel accommodations or other travel arrangements like car rental.
5. Client-Related Expenses
You may have taken a new or potential buyer or seller out to eat in the past year in an effort to get a better rapport with them before having them sign on the dotted line.
You can claim 50% of these dining and entertainment expenses as a tax deduction.
If you have more questions about tax deductions you may be eligible for, talk to a FBC tax professional for further guidance.