Once again, as we approach the end of the year, you have an opportunity to get any last-minute tax deductions in before December 31st.
This is the best time to purchase amenities for your business so they show up next year on your deductions.
Think of anything you need, whether it’s for your office, marketing or transportation that relates to your work. Agents don’t realize the number of things that help them with their job and can be counted as business expenses a lot of the time. Here are some tax tips for the end of the year.
Purchase new software or marketing automation programs.
Buying any type of computer or online software for your business is tax deductible. Consider updating your Microsoft Office Suite. Accounting software like Quickbooks is another tool you could use.
Project management programs like Basecamp or Slack also count. Even security programs for your computer at work qualify for a tax write-off. Marketing tools are included, too. Mass email tools like Mailchimp should be renewed before the end of the year. Any programs you use for automated text messaging should be renewed for the year now, as well.
Anything you pay for that helps your real estate business is eligible. This can include any networking apps you pay for, like Linkedin Premium, or even apps that help you schedule your social media posts.
Buy new devices.
If your phone, computer or tablet is running slow, you should upgrade before the end of the year.
Computers are a little different because they usually have to be filed as depreciables. Under section 179, you can file them as a deductible if they are put into use by the end of the year. You can do the same with a new business phone or tablet.
With real estate (and everything else) becoming so mobile, a slow or lagging phone can hurt your business. From answering emails and texts to running your all-important social media accounts, you need to be operating at a high level.
There is a limit on section 179 deductibles of $25,000, but that should be much higher than the cost of your new electronics.
Replace or upgrade your office furniture, equipment, and supplies.
This is for those of you in a home office, or if you plan on branching out from your firm’s office. Like the electronics, if you buy it and put it to use before the end of the year, it’s eligible to go under section 179.
This doesn’t just apply to desks and chairs. It’s anything that gets put to use in your home office before the end of the year. Paper, pens, landline phones and other small supplies all qualify.
Again, all of this must fall below the $25,000 ceiling you can claim through section 179.
Pay professional membership dues or any subscriptions you have.
These are also eligible for tax deductions. Just pay them before the end of the year, and you can include them. It’s also the best time to start new memberships — you can find a list of them on NAR’s website.
Get year-long subscriptions to services or products you might need later on for your business. Inman select, research and sales journals, and the Wall Street Journal are some of the common subscriptions Realtors utilize.
Start your retirement plan.
Even if you work for yourself, you can still open a retirement plan over and above an IRA or a Roth IRA. Both are great choices that allow you to set aside a large amount of money if you don’t work with a branch.
There will typically be some costs to get these plans started. However, if it’s a new plan, you can claim 50% of your first thousand in setup over the first three years. If you have a SERP IRA, you can wait until you file to claim it on your taxes. But for 401ks, you have to do it before the end of the year.
If you haven’t started a plan, now is the best time to do it before the year ends.
Don’t forget your driving mileage.
This is something agents often forget to claim. If you don’t keep track of all the driving you do for work, you should have a general idea. But start tracking it next year.
You can write off miles spent browsing areas, going to meetings and traveling to the office. Miles used running business-related errands and driving to showings also count.
Commit marketing and advertising money.
You can add to your budget or just commit to your 2019 marketing budget. If you sign up for services or get materials, you can add these to your deductibles before the end of the year.
This is also a good time to refine your 2019 marketing plan, since you’re already looking at the numbers. You don’t have to stick with a plan, but top agents have a yearly plan on how they will attack their marketing.
Professional travel can be written off, as well.
This is another thing that often slips between the cracks. If you’re going to any real estate conference, book the flight this year so it can be included on your 2018 taxes. Conferences are a great place to learn about the market and new trends, while networking. Write off your flight before the year ends.
If you have any questions about what you can write off, ask a professional. Places like Turbotax often let you speak to an expert for free. You don’t want to make mistakes on something as important as your tax return.
Our members can write off their membership as a business expense.
Do you know about our MyBooks membership? Our members instantly become respected authorities in their markets.
Click below to receive a free sample of the product that’s changing the game for Realtors just like you!
Joe Nickelson is a real estate professional dedicated to helping home buyers and sellers achieve their real estate dreams, and helping real estate agents stop using the sometimes-vicious tactics that weigh on their consciences. He believes that the Smart Agents books will, quite literally, change people’s lives for the better. Check out his full bio here!