When it comes to your real estate business, you could be missing out on thousands and thousands of dollars worth of deductions.
I’m talking about the kind of big money saving that could add another zero to your income at the end of the year.
The trickiest part of it all is knowing the legal loopholes and how they pertain to your real estate business. Here are the most commonly missed deductions…
What many people fail to realize is that saving $20,000 at the end of the year is, in essence, the same as making an additional $20,000 in that year. The only difference is that it’s almost always easier to save money instead of earn it.
So let’s look at the deductions you could be missing out on and how to properly save with them:
Auto Expense
That’s right, even some auto expenses can be deducted for your real estate business. The technicalities can get confusing, which is why I always recommend consulting a lawyer/accountant when filing, but if you buy a vehicle in your real estate business you can deduct the cost of maintaining the vehicle:
- Gas
- Oil
- Repairs
- Car wash
- Tires
- Etc.
Plus, in some cases you can depreciate the vehicle as if it were any other item and potential make a deduction of over $20,000 up front.
Startup Expenses
Haven’t started your real estate business yet? Don’t worry. There are quite a few deductions you can make with the costs associated with starting your business…
- Filing fees
- Legal expenses
- Business structure setup
- Accounting fees
- Office equipment and furniture
- And more
Of course you’ll need to keep good records including receipts for the above items and services.
Travel Expenses
This is a great one. If you can prove that on any trip you spent more days on which you perform business activities than not, you can write it all off.
The trick here is to keep a folder with business cards of real estate agents or property developers, any promotional material relating to real estate, maybe a personal file with areas or neighborhoods and notes on why they interest you, etc.
So why not do a little “work” in the morning by collecting info while you take a self-tour around your destination and write it all off later?
Your Kids
This is one that hardly anyone knows about, but you can write off your kids just by following a few simple steps…
1. Have a written job description,
2. Pay them a reasonable wage,
3. Have your child or children keep track of their hours.
You should then be able to deduct the cost of their salary up to a certain amount!
