As the realization that taxes are due in 10 weeks sets in, most real estate agents are desperately trying to find every deduction and loophole to help minimize their tax obligation. Being blindsided by a huge tax bill is not something most of us look forward to, but I’m sure you’ve experienced a tax scare at least once in your career. Fortunately, here are two straightforward actions agents can take to help reduce any additional tax payments at the end of the year and make tax season less daunting. First, leverage key write-offs Most agents know that write-offs -- or tax deductions -- reduce your taxable income, and therefore, your tax bill. By tracking every expense in a spreadsheet or financial tracking app, you can calculate how much money you are able to deduct to lower your tax rate and keep more profit. There are potentially hundreds of tax deductions available to real estate agents, but some of the lesser-known deductions that you can take advantage of are S...
- Look at write-offs like business equipment, state and local taxes and commissions paid, which can quickly take big chunks out of your potential tax bill.
- Open a dedicated tax savings account to put 30 percent of your gross earnings away throughout the year and avoid tax season stress.
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