Industry News

Agents’ 3 common misconceptions on tax deductions

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Taxes are complicated. As a result, lots of people are not fully informed when it comes to tax deductions. Here are three common misconceptions that can cost real estate professionals dearly: 1. You must pay cash to get a deduction When you buy stuff for your business, such as a computer or automobile, the cost is deductible through depreciation or expensing. Some people are confused about what constitutes "cost" for tax purposes when a purchase is financed. This includes not only the purchase price, but also sales tax, delivery charges, installation and testing fees, if any. You may depreciate the entire cost, no matter how you paid for the property -- in cash, with a credit card, or with a bank loan. 2. You must have a home office to deduct business property in your home Many business owners believe that they can't deduct any expenses they incur while working at home unless they qualify for the home-office deduction. This is a myth that has cost many taxpaye...