Today TaxMama hears from Mike from Florida, “I am getting into the real estate sales business in southwest Florida. What business-related expenses are normally deductible? May I deduct the training required by state law? Car expenses, including leasing, fuel, and maintenance for a business-only vehicle? Office space in the home? Anything else?
Well, Mike, if you are just getting into real estate sales, the costs of study materials and courses, and the exam are not deductible. You can’t deduct the cost of getting trained
or licensed for a new career.
Once you get licensed, then, yes, your course, memberships in Realtor organizations, multiples, databases, advertising, etc. will all be deductible.
Naturally, all normal business expenses are deductible. I can’t possibly list them all here.
But I have listed many of them in Chapter 6 of Small Business Taxes Made Easy.
Of course, you can read Read IRS Publication 334 for the general details
https://www.irs.gov/formspubs/page/0,,id%3D11457,00.html
Here are some suggestions specific to real estate:
Track your costs for open houses – sitters, food, decorations, etc.
If you pay for improvements, repairs etc. to help a house sell, yes, those are legitimate expenses.
As to auto and all that stuff, you’ll find lots of information if you search TaxMama.com –
https://taxmama.wpengine.com/search.html And Chapter 8 of Small Business Taxes Made Easy will give you great detail.
Of course, it wouldn’t hurt if you engaged the services of a local tax professional who knows the real estate industry, especially the issues in your own area. They might be able to give you some ideas that I haven’t.
And, remember, you’ll find answers about lots of information about business and lots of tax issues, free. Where? Where else? At TaxMama.com
- Ask TaxMama :: Where taxes are fun and answers are free
- Small Business Taxes Made Easy :: Chapter 7 for expenses, Chapter 8 for Vehicles
- IRS Publication 334 :: Tax Information for Business
- TaxMama.com :: Search for auto expense using Google
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