Tax Season, Is It Really Ever Over?

Tax Season, Is It Really Ever Over?

In short, NO! Let’s start out with the important fact that you can deduct MORE THAN 50% OF EVERY DOLLAR OF YOUR BUSINESS EXPENDITURES ON YOUR TAXES! DID YOU KNOW THAT? Here is a real scenario showing an extra $12,000 of deductions because of how taxes were reported. Consult with your tax preparer! Would you like to write off an extra few thousand dollars or have an extra thousand dollars in your accounts after filing your taxes? All it takes is to organize your receipts and books effectively! There’s no special secret and nothing you need to pay for. The way in which your taxes are reported is critical to your return. Wait, is it even possible to save money without having to spend? That is a valid question as it seems we are being charged for everything!

Real estate agents and other professionals in the housing industry have many expenses that can easily be deducted, including a few things you may not have known about. Chances are, you could be deducting significantly more than you are! 

With the goal being to increase your cash flow, here are some tips for you to help deduct more money and put more cash back in your account!

First and foremost The biggest thing to keep in mind is to start today & stay organized. It is easy to let things pile up and to wait for tax season to come back around so let’s not repeat what happened last year. Being proactive will help you feel much more comfortable about the process. The following are some simple ways to keep everything organized.

  1. Get an organizing folder to store your records. Either place it near your dresser or your in home office. Keep things neat by separating them into categories such as ‘gas’, ‘dining & entertainment’, ‘advertising’, ‘ ‘postage’, ‘plane tickets’, ‘ continuing education’, ‘office supplies’, and ‘office.’ This allows everything to be simple and readable, while taking the guessing game out of the picture.

2. One of the most important ways to be organized is digitization. Creating digital records of your important papers preserves them and keeps your office from being cluttered and can directly be saved. Below are a few inexpensive scanners that are mobile and can be easily relocated. Also, newer phones also have the ability to create scans of pictures you take.  

3. In addition to digitizing the records that you have, it is very helpful to keep comprehensive backups on a secured portable flash drive for several years in the case of an audit.

Remember, the longer you wait to get organized, the more time it will take to maximize your deductions and save next tax season. In order to be organized you need to know what to keep track of. There are many everyday expenses that are deductible and are commonly missed.

  • Wages: Startup costs up to a threshold are deductible, your assistant’s wages, and even part of your commission is deductible.
  • Transportation: Understanding just how much you can deduct for the gas you use will make a big impact on your savings. Apps such as MileIQ  and Triplog  easily track your mileage to be reported during the tax season.  You may be able to deduct an average of 54 cents a mile according to online sources. Also, be sure to keep receipts for all public transportation and flights taken for business as well as continuing education classes. It doesn’t end there. You can deduct a portion of your car payment as well.
  • Your office:  also vital. Your office or home office is deductible. The percentage of your home that is dedicated for work can be deducted up to a certain point.
  • Office Supplies: Internet access, postage, computers, and everything down to staples can be deducted and will help you save.
  • Meals and Entertainment: Spending to earn new business or maintain business contacts? While you are on a business trip, out to eat with a contact, that money can be deducted!
  • There are many more ways you can get tax deductions when you run your own business. Click here to view more ways to save money.

Now that tax season is over you can start fresh and it doesn’t take much time at all to potentially save significant amounts of money.

Startup costs:  Special considerations based on how much you spend.  

Bank fees and Interest payments: Account fees, service fees and others are deductible.

Carryovers: Specific deductions from the previous year apply

Health insurance: Family circumstances affect how much.

Take Aways:

1) Organization is first and foremost

2) You can likely save more than you are

3) Deduct, deduct, deduct!

*If there was anything that you learned or were reminded of, please share this article from social media with your colleagues and pay it forward. Pun intended!