Tax Tips for Independent Realtors

Tax Tips for Independent Realtors

There are many challenges that independent realtors face as the tax-season knocks at their door. Even if you don’t have the withheld taxes from the daily paycheck, you can lessen the tax challenges by knowing all the relevant deductible expenses. Some small business tips are really effective for the independent realtors to save money.

Auto expenses and mileage

You can save lots of money from the auto expenses. You may spend huge time on the wheel or by travelling to get the clients for new properties viewing and staging new homes. Depending on the mileage you drive, you save more money. You can also save money from car maintenance such as tune-ups the car, new tires or for car washes.

Mortgage saving

The general rule of law is that a forgiveness of debt results in taxable income to the person owing the debt. The example that everyone has become familiar recently with the homeowner who cannot afford to keep up his mortgage payments, but who cannot sell their house for enough to pay off the mortgage. Sometimes, these individuals negotiate with their mortgage company. It is called a “short sale.” In a short sale, a mortgage company agrees to accept what the homeowner can get for selling their house in full satisfaction of the mortgage.

Allowable deductions of the tax

You can take the advantages of each tax deduction that you are able to save. Even you can deduct some minor costs that even uncountable for your independent business.

Some easy way of cost deduction:

  • You can save money on marketing, open house signs and sales, mailers, website maintenance and development and business cards.
  • Can save money on real estate training, coaching and education costs of a new realtor
  • Cost of getting the new licence of a realtor or the licence renewal charges
  • Travel expenses. Costs of foods and lodging
  • You can also save the tax amount by establishing your office in your home as you will be able to save the tax that required getting a place on rent.
  • Limit your entertainment or gift expenses that you offer to your clients.

Equipment and supplies

There must be some necessary tools that you need to run your business like the computer, staging decor, camera to take the pictures of properties, lock boxes etc. You can save money or tax from there and even the cleaning suppliers related to your work are a place to save more money.

Wholesaling

As an independent real estate startup businessman, you may follow one of the most effective strategies, the wholesaling business strategy.

This process involves finding a real estate seller who is willing to sell large portions of her/his property and then finding the buyers as well who want to buy that property, the key to success in this method is to have first-class communication skills and a sharp business mind and always keep an eye on a searching for potential buyers and sellers. This method involves almost no investment on the realtor’s part as he just needs to facilitate the deal between the two parties and in the process, you will be able to make a handsome commission for yourself.