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Unit # 10
Mississauga, ON. L5L 1X2
Oakville:
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Suite # 200
Oakville, ON. L6H 5R7
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Tax Preparation Services for Real Estate Agents

Tax deductions for Real Estate Agents


Tax preparation services for Real Estate Agents

We are experts in tax preparation for real estate agents and CRA audits for real estate agents and other self employed individuals located in Mississauga, Oakville, Toronto and most of the GTA. We are pleased to offer you this complementary Tax Deductions Check List Tool  – Please make sure you go through it and use it as a working tool to help you stay in control.

We help a lot of Real Estate Professionals reduce their taxes – please feel free to give us a call anytime at 416.454.8812, we would be more than happy to answer any tax questions you may have.

Real Estate Tax Talk

As a real estate agent, your gross commission is not salary. It’s business revenue that must cover both your salary and your expenses. Manage it successfully with a sound tax strategy. By maintaining careful expense records, choosing a professional tax accountant who takes the time to claim the full range of allowable deductions, you can enjoy significant tax savings and net more from each hard-earned commission check.

File receipts for every expenditure that might be deductible. Common items include local real estate board dues, license-renewal and broker classes, desk fees, car expenses, cell phone, advertising and marketing, insurance not paid by your broker, and the cost of business equipment and supplies not provided by your broker.

Tax deductions really add up

Many people, even sophisticated real estate professionals; don’t fully appreciate just how much money they can save with tax deductions. For example, if you’re single and your taxable business income is $100,000, every dollar you deduct from your taxable income will save you close to 50 cents in taxes.

To understand the full value of your deductions

There are dozens of possible tax deductions for real estate professionals. Any expense for your real estate business is deductible if it is:

  • ordinary and necessary;
  • directly related to your business; and
  • reasonable in amount

What can you deduct?

Only Business expenses are deducible – you cannot deduct personal expenses. However, if you buy something for both personal and business use, you can deduct only the business portion of the expense.

Subject to some important exceptions, there is no limit on how much you can deduct, as long as the amount is reasonable and you don’t deduct more than you spend. As a rule of thumb, an expense is reasonable unless there are more economical and practical ways to achieve the same result. If the CRA finds that your deductions were unreasonably large, it will disallow them or at least disallow the portion it finds unreasonable.

Tax deductions checklist for Real Estate Agents:

Here’s a checklist of common expenses for real estate agents and brokers that you can use to make sure you don’t miss any deductions this year:

  • Advertising expenses, including websites, mailing lists, newspaper advertising, fliers, online advertising, postcards, promotional materials, and anything else you pay for to market your real estate business.
  • Bookkeeping, accounting and legal fees.
  • Business meals and entertainment (only 50 percent deductible).
  • Cab fares for business travel.
  • Car and truck expenses, including business mileage, depreciation, insurance, interest on car loans, lease payments, license plate fees, parking expenses, and tolls.
  • Cell phones.
  • Computer software.
  • Computers.
  • Desk fees.
  • Education to maintain or improve required skills.
  • Home office expenses (if you qualify).
  • Insurance.
  • Interest, such as interest for business loans, interest paid on business credit cards.
  • Internet access fees.
  • Office equipment.
  • Office expenses, including rent, cleaning and maintenance, and utilities.
  • Office supplies.
  • Postage.
  • Professional dues and subscriptions.
  • Subscriptions to professional journals.
  • Taxes, including payroll taxes for employees, state and local business taxes.
  • Telephone service fees.
  • Travel to business conventions, including transportation, lodging and food.
  • Wages and benefits paid to employees. 


 

3 Responses so far.

  1. Sherry Wilson says:

    I am looking to purchase an Investment property, can I use the down payment and closing costs as a Business write off for my Income Tax Returns. I am a Broker in Real Estate. I am looking at ways to reduce my income tax this year. Thank you Sherry

    • Mina says:

      Hi Sherry,
      No you can not. The Down Payment of your investment property is not a business expense for your real estate business activity. Even further you could not even use this down payment against your rental income as an expense. However if you borrowed this down payment, only the interest portion on the loan is deductible. Please give me a call at 416.454.8812 or email me at mina.hanna@accountingontrack.com and we can have a further conversation in depth.

  2. Joe Berger says:

    Is a real estate commission shared by one broker with another broker tax deductible?

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