The topic about auto repairs as deductions made me think of this...what can we deduct? I know that our Realtor Association fees, MLS fees, office supplies, and things of that nature can be deducted, but what else? How about electronics, such as computers or cell phones? Closing gifts? Anyone have a list of acceptable deductions they could share? Thanks.

Ian

Hello,

A "portion" of many things can be written off. The best (and safest) list will come from your CPA.

There is a book in the book store called 1001 tax deductions. It is well worth the $$$. (and is also a deductable expense).

Macbride I wish someone would answer you. I would like to see some deductions myself. If everyone could just post 2 that they know of. Common sense would have us to verify with a CPA before actually taking the write off.

LOL! Thanks, but no thanks. I've always prepared my own returns, and plan to continue doing so.

Hmm, I see a trip to the local bookstore or library in my near future. Thanks.


Anyone else?

i know gas is a write-off but its only a portion. i have many gas receipts.

Advertising:

• Business Cards (Picture will cost more, count it)
• Telephone listing
• Internet access
• Career apparel (if it has company logo)
• Car door signs
• Client follow-up (Files, Greeting cards, ect)

Automobile expenses:

• Gas
• Oil
• Drivers License
• Parking & Tolls
• Repairs
• Wash & Polish
• Motor Club Dues
• Insurance
• Depreciation (Special Rules, look into)

Dues:

• REALTOR dues
• MLS Dues
• Chamber of Commerce (Clear/Documented business purpose)
• Any other club (Athletic, Social & Sporting Do Not Count, no matter what)

Education

• Seminar registration
• Convention registration
• Continuing Education (costs for pre-licensing don't count)

Entertainment (Rules apply, look into)

Gifts to clients (IRS has special rules, look into)

Office Supplies

• Pens/Penciles/Staples/Paper clips, ect
• Paper (printing, fax paper, ect)

Postage

• USPS, Fed-EX & UPS will provide receipts, if not, ask.

Legal/Professional consultation (When about business)

Laundry/Dry cleaning (For career apparel only, all when out of town on business)

Publications

• Wall Street Journal
• Business Week, ect

Books on Real Estate/Business

Real Estate License (Renewal only, original doesn't count)

Business Travel Expenses:

• Transportation
• Meals
• Lodging
• Taxis
• Tips
• IRS has special rules, look into.

Insurance

• Auto
• Errors & omission

Telephone

• Business use (log calls and verify each month)
• Special features (Call waiting, call forwarding)

Fax (Business use only)

Depreciation

• Cars
• Desks
• Computers/Laptops

"Expensing" Check current IRS limit

Wages to Assistants

Rent (If you rent space from your broker)

In-Home office expenses (check into)

Personal property taxes (For bussiness equipment)

I hope that helps some, best bet is to look into everything and maybe even hire a CPA.

Thanks for the list SkyFather. Anyone else want to add to it?

LOL... If you don't know what you can deduct, why would preparing your own returns be a smart move? Using a professional with expertise in a field that you're not is a smart move. Using a CPA will also yield much higher returns.

No problem, Gald I could help.

While non uniform business clothing is not generlly deductable, business clothing with logos, i.e. golf shirts with your company or team logo, usually are. Dry cleaning & laundry of business clothing is an expense.

Trips to conventions, seminars, meetings, etc. can often be deducted. Funny how lots of those things take place in vacation destination locations. Take the family or your spouse and stay over a few day afterward. You can still deduct your expenses getting there and during the event therefore discounting your vacation considerably. I like writing off my tan.

Skyfather I knew we could coun't on you. Thanks for answering.

luvduv haha. No problem, just gald to help out. If you have any questions about anything, run it by the members of the board, but you can email me/PM or even message me Yahoo,AOL,ect anytime

If I understand taxes correctly, it goes something like this:

You make lets say like $100,000 last year. Please note this may seem very unreal, but that's because it is!!!

$100,000
-$10,000 (Office supplies)
-$3,000 (Car Insurance, Drivers License,ect)
-$5,000 (Gas,oil,ect)
-$20,000 (Everything else in that list above)
--------
$62,000

So your taxed on $62,000 dollars? If so, how is that taking a vacation when there is a convention, seminar, ect by writing it off makes it cheaper? Unless you mean that by writing off the few grand you will likely spend, means you get taxed on less, and that's less money to Uncle Sam.

I do take it I'm missing something because I do not understand what it takes for the goverment to give a check back to you. Maybe like they took too much away from you during the year when taking money from your paycheck?

If anyone could please provide a general overview, That'd be great

What generally falls into the category of office expenses? I have a seperate category called office supplies, in which I tally all of my pens, paper, stationary, etc.

Office expenses are a separate tax category from office supplies and I can't for the life of me figure out what goes in there...maybe postage stamps?

I would think Postage stamps, if you have to overnight something somewhere, that receipt could go into that folder. If you don't have one for like a folder for Advertising, you could put receipts in that from ordering them and such. Otherwise, I have no idea. It's a good question.

Shane,

im not a CPA but i do believe that your example of how taxes work is correct. the more money you can deduct, the lesser of an amount that the IRS can consider your income, in return you get taxed on a lesser amount. i wonder if you deduct say $40k from $100k if the IRS would consider you in a tax bracket for $60k or stay in the same tax bracket for the $100k? hmmmmmmmm.

Question on Internet Access - can you deduct the entire amount or just the percentage you use for business?

Thanks.

:rolleyes: With the help of my fellow agents, I'll find out what is deductable and what is not, hence the reason for this post. Beyond that, I have no problems with preparing my own returns...I always have and always will. You may like paying for a service you don't need, but I don't.

Okay, I thought I had got the most of it right, I'm still unsure about the refund checks people get, but I guess I'll find out sooner or later. LoL! Thanks!

I posted this on another thread, just wanted to make sure it reached the people interested.

Here is a link to a snapshot that might help:

http://www.selfemployedweb.com/business-expense.htm

Here is the actual IRS Info on it:

http://www.irs.gov/publications/p535/index.html
Now that IRS link is for the 2004 Return FYI.

The IRS is, of course, the best free method of finding what qualifies as an allowable deduction. Jasondt2001's post is a good publication from the IRS, but they have many others that may cover other deductions you may have. The best bet is to visit the IRS website and review all of the publications they have and see what may apply to you.

http://www.irs.gov/formspubs/article/0,,id=98171,00.html

One other thing to keep in mind. Many things, such as your computer or cell phone, MAY be deductable, but not always 100%. If you split the use of the item between your business and personal life, you will only get a partial deduction on your business taxes.

For example, if you have a digital camera you use to photograph listings, you may be able to deduct it as a business expense. However, if you claim it @ 100%, you better have a second camera you use on family vacations to show the IRS should they audit you.

While I often do my own taxes, the use of a CPA could be very valuable to you. After all, the hours you spend trying to determine what is an allowable deduction, reading the publications, etc. could be spent selling another house. Opportunity costs are high when doing your own taxes.

This is a great post that I've been looking for. Does anyone know if you can deduct business clothing? I've heard yes and no, but nothing concrete. I just started last year, and I had to buy all new business clothing (mostly suits) since I didn't have anything like that before. Thank you.

I had no idea there were so many PYOTs in here. Personally, it makes sense to me to pay a CPA. I figure I make more per hour than my CPA. It would take me AT LEAST 8 hours to prepare my own taxes and I'd most likely miss alot. I own rental properties and have another business in addition to being an agent.


PYOT - Prepare Your Own Taxes
A second cousin to the FSBO

Well, some of us are just getting started, so we can't afford CPAs. Some may be making more than CPAs/hour, but some of us don't. This was my first year, and I didn't get to do as well as others who could afford that luxury. I'm not exactly like a FSBO (or second cousin), I'm not trying to save money, I don't have it to spend. So if someone who knows the answer to my question can actually help me out, I would greatly appreciate it. Thank you.

Special Agent MacBride, I think the money spent on a cpa is well worth it. Let me give you a good example of how a good cpa can make all the difference.

Last year my managing broker/brother made 164,000. He paid 30,000 in taxes (because he had a bad cpa). This year he spent the money on the best cpa around and made 153,000. He is paying 800 dollars in taxes this year. I made 48,000 dollars and am getting a tax refund.

My 2 cents is spend the money and find a good CPA let them tell what you can and cant right off.

Just imagine, this whole thread could be a moot point and April 15 would be just another day!

http://www.fairtax.org


Tell your friends and family! Tell your representatives and your senators!

I agree, get a CPA. Before getting into Real Estate I worked for 5 Years at a CPA Firm preparing taxes.

Up until this year, I have always done my own taxes. In 2005 though (My 1st Full Year) I grossed around 40K and did not pay 1 dime to the IRS. My husband is also self-employed, and he paid NO taxes either.

I prepared my taxes myself and found I owed around $4K in Income & Self Employment taxes.

Not satisfied. I took everything to the CPA firm whom which I worked for in the past....

Results: A $396 Refund. Cost: $190

So you see, it might actually COST you money not to use one. It almost cost me $4000 and I know all the deductions. There is more to it than just Deductions. It is how you use them & where you use them!! No one can prepare your taxes better than a CPA, it is their business.

Previously you stated that that you didn't want to pay for services you don't need because you can do it yourself. Not trying to be rude here, but you kind of sound like a Stubborn FSBO.

If you truly believe you can net a FSBO more money because you are an experienced professional, would seem to me a CPA can do the same!! Use one, they are well worth the couple hundred dollars!

I'm not sure if the last two paragraphs were for me, but I never said I didn't need their services, i said I couldn't AFFORD their services. Trust me, if I could, I would go in a heartbeat, but unfortunately I seriously don't have the money.

Cheifnet,

No it was not you that said this, it was the original poster, Macbride:

"With the help of my fellow agents, I'll find out what is deductable and what is not, hence the reason for this post. Beyond that, I have no problems with preparing my own returns...I always have and always will. You may like paying for a service you don't need, but I don't."

But have you ever prepared a Schedule C and dealt with Self-Employment issues? I would gather the answer is "no" or you would already know what is deductible. Please consider getting a CPA.

Anything I spend relating to Real Estate - I mean ANYTHING. Closing gifts, gas, envelopes, computers, paper, coffee for a client... EVERYTHING - gets bought either through a card specifically for that purpose or via a check from my real estate business account.

I just hand off the year end summary for both things to my accountant and he works his magic.

R

SUV Tax Break, Section 139: http://www.selfemployedweb.com/suv-tax-deduction-list.htm

Used to be able to write off more than $100K two years ago, but now only up to $25K for the first year.

Free Cayenne, sort of...

I agree with the above responses.

Hiring a CPA is a very professional choice. Not only would they help you with this year's taxes (I guess my response is moot now that it's tax day), but they can help you get organized so that you know what types of categories to create, receipts to keep, and expenses to track for the coming years.

Also, a good CPA may be willing to accept payment when your refund arrives!!

I'd ask for a referral from a friend in your area. I used a CPA for my personal taxes this year, and am getting back almost $3600 b/w Fed and State. It cost me $103 (which is deductable). I'd avoid H&R Block. They are overpriced and, in my experience, you don't recieve very personalized attention.

"LOL... If you don't know what you can deduct, why would preparing your own returns be a smart move? Using a professional with expertise in a field that you're not is a smart move. Using a CPA will also yield much higher returns."

I do not use a doctor,lawyer or realtor. I am a FSBO type personality. The other day my tooth had a ache and I just pulled it with my needle nose plyers problem is I pulled the wrong tooth. At least I saved money thats all that matters.

This post was in jest but you get the point. lol