Real Estate Professional Tax Deductions Checklist
April 10, 2011
For Real Estate Professionals the housing market has certainly not been as nice this past year and here it is tax time, another time when Uncle Sam is not as nice either. The best way to ensure you do the best you can with all those tax papers are to make sure you take all the tax deductions you are entitled to take.
What can I deduct?
There are several tax deductions just for real estate professionals. You can deduct any expense for your real estate business as long as it is:
“Ordinary and necessary; directly related to your business; and reasonable in amount (see: Internal Revenue Code Section 162)”.
An expense for your business only need to help your business is some way even if only minor. A one-time expenditure can be deemed ordinary and necessary.
On the other hand, you cannot deduct personal expenses. You can only deduct a computer if it is not used for personal tasks including playing games or paying household bills.
If you do purchase an item that will be used for both business and personal usage, the business portion can be deemed an expense such as using a cell phone for your business and personal use. If you use the phone half the time for business, this can be deducted as a business expense.
Checklist of deductions
Here is the checklist of the most common expenses that real estate brokers and real estate agent use. Make sure you do not miss any of these deductions.
•advertising expenses, including websites, mailing lists, newspaper advertising, fliers, online advertising, postcards, promotional materials, logo clothing, and anything else you pay for to market your real estate business;
•bookkeeping, accounting and legal fees;
•business gifts (up to $25);
•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 (but not courses you take to pass the real estate licensing exam);
•home office expenses (if you qualify);
•insurance, including health insurance, errors and omissions insurance, business liability insurance, and business equipment insurance;
•interest, such as interest for business loans, interest paid on business credit cards;
•Internet access fees;
•map books;
•office equipment (cost may be deducted in one year using bonus depreciation or IRC Section 179);
•office expenses, including rent, cleaning and maintenance, and utilities;
•office supplies;
•postage;
•professional dues and fees — for example, multiple listing service dues and dues paid to the local Chamber of Commerce, Realtor associations, and real estate license renewal fees;
•referral fees and commission rebates;
•retirement plan contributions;
•subscriptions to professional journals;
•real estate franchise fees;
•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.
Resources:
Internal Revenue Code Section 162
Internal Revenue Code Section 179
Feng Shui Tips for buying a home
February 3, 2010
The way to look at a home in the Feng Shui concept is to use what is called Feng Shui eyes. You do not have to use Feng Shui eyes until you have ensured the house has all your requirements such as square footage, the number of bedrooms, etc… that you have on your requirement lists. Now, get your Feng Shui eyes working.
When buying a home the problem is that most homebuyers only list a few objections when looking for a home, which include location, size, and price. The problem is there is so much more to include in your search. If you happen to use the concept of Feng Shui, you will be able to learn of possible problems in a house besides just the number of square footage and the number of rooms. More Realtors are beginning to learn this concept in order to help their clients find the best possible home that will meet their needs in all ways.
Buying a home can be a very stressful adventure as the home is the place you rest, sleep, enjoy the family, and everything else in life. Your home is the center point to your life and has to meet all needs in order for you and your family to enjoy your home.
As you, begin your close up look at the house start with the exterior. You know the house your requirements but now look deeper. You want neighbors that will not drain your energy with negative energy. From the property, you may see negative energy in the way of garbage dump, cell phone tower, cemetery, funeral home, large buildings, dead vegetation such as trees, plants, and flowers, railroad, airport, and highway. All of these are great examples of negative energy or energy draining places. These things can lead to physical stress, emotional, or psychological stress if a person lives nearby these places and sees them on a daily basis.
The lawn should not slope downward in the front or the back of the home. If the lawn slopes download in front it can cause career problems, sloping in the back can cause wealth or relationship problems. Very steep slopes can cause those that live in the home to feel insecure and unsafe.
The front entry should be clearly seen from the road and be very welcoming. This will also welcome all kinds of great opportunities to come into your life.
The International Feng Shui Guild, the Feng Shui Bagua states that “consists of eight external houses and a central one called the Tai Ji… Each of the eight houses… (Represents) life aspects in resonance with that trigram sector.” Thus, your lot should be square or rectangular along with the house. If the house and lot is not of this shape, the owner will be missing a section and may cause problems to arise. The issues relate to life aspect such as wealth/power, reputation, romance/relationships, children/creativity, helpful people, career, knowledge, and family. The center of the home represents health.
The number of your house should not include the number 4. Using Chinese numerology, the number 4 stands for death. Therefore, this number is to be avoided. The number 8 symbolizes longevity and the number 9 symbolizes wealth.
A house facing south is favorable in Feng Shui. If the home is in the Northern Hemisphere the south does receive more sunlight, which represents growth and vitality. Homes that face east embrace the morning sun, which provides new beginnings. Homes facing west embrace the setting sun and will have more energy for endings. Homes facing north are to be avoided as they receive the least amount of sunlight at the front of the home.
For more information regarding Tulsa news, articles and commentary on homes sales, farms and commercial property in the Tulsa Real Estate market please re-visit or subscribe to our RSS Feed on our Tulsa Real Estate Mall Blog.
Tax Credit Nearing the End
January 4, 2010
The looming end of the tax credit that has helped so many Tulsa area buyers is a bit scary especially if you look at mortgage applications and the Tulsa housing market. The Mortgage Bankers Association released a report that stated mortgage applications are at a six-month low and rising rates are also cutting into the good news in the refinance market. Rates on the 30-year fixed mortgage hit 5.18% for the week ended January 1, 2010, which is the highest level seen since August 2009.
This along with the expiration of the homebuyer tax credit in just a few months is sure to weaken profits for Bank of America, Wells Fargo, and other lenders across the board.
As the tax credit is due to expire in the spring home buyers may jump back in the market to get a piece of this credit, however, home sales were falling at the end of the year.
NAR chief economist Lawrence Yun stated, “The fact that pending home sales are comfortably above year-ago levels shows the market has gained sufficient momentum on its own,” and went on to say “We expect another surge in the spring as more home buyers take advantage of affordable housing conditions before the tax credit expires.”
Paul Dales, an economist with Capital Economics stated, “Sales are likely to steadily increase again as the contract-signing deadline for the new extended and expanded tax credit as the end of April approaches,” … “That said, the prospect of a flood of bank-held properties hitting the market at some point will remain a lingering concern for some time.”
Some individuals have bought homes and are excited about the tax credit while others that jumped in during the first tax credit in 2008 are not as pleased as they must repay their credit. The tax credit at the end of 2008 was deemed a loan from the government to aid the economy. Shortly after this “loan”, another save the economy “tax credit” occurred in the same amount of $8,000.
We hope this information about the Tulsa home buyers Federal Tax Credit was helpful. For this and addition news or updates on the Tulsa housing market please subscribe to our Tulsa Real Estate Mall Blog RSS Feed.
Making Great Real Estate Agents
September 20, 2008
As a Tulsa real estate agent, you more than likely find clients through word of mouth of satisfied customers. Due to this fact, you should be aware of what makes a great real estate agent and a very awful real estate.
Too many times, homebuyers or home sellers do not do their homework and wind up with a real estate agent they could almost strangle. The reason is they are more involved in the quest of new home. They want to hurry up and find home with all the amenities they desire and get packing or they want to sell their home quickly so they can move into their new home as well.
What should you look for in a real estate agent as a homebuyer or home seller?
Here is a list of the most popular things clients want to see in their real estate. By using this guideline, you should have a wonderful experience shopping for a real estate.
1. One that listens – Have you ever met a person that when you talk with them it seems to go in one ear and out the other? If you have a realtor like this, you have a terrible one. You need a real estate agent that will listen to your desires. If you give them an area, you wish to live, or a price range for your new home and the list you are given to see is in TimBuckTwo or $50,000 over your maximum range, you have a realtor that is definitely not listening.
2. One that works with you along the way – A great real estate agent will have leads ready for you to see in a very short time, explain to you about the house including any information they can find out about the sellers and even go so far as to have a list of lending companies that might help you. Will they not only give you this information, but also will go with you during the appraisal or help you fill out paperwork or whatever might be needed to make your home purchase go smoothly.
3. One that will help you objectively – You will more than likely fall in love with one of the first houses you visit, however, a great real estate agent will help you see everything there is to see a house before you sign the dotted line. You should have given your realtor a list of things you desire in a home such as location, size, and other amenities. When you see a home that has all the amenities you may want to sign the dotted line. Your real estate agent, if they are great, should remind you of all your stipulations and help you see all sides of the property. Is it smaller than what you envisioned, does it have a nice backyard for your dog, will it fit your lifestyle, etc…. If you are not happy with the purchase, later on you will not be as happy with the real estate agent.
4. One that understand the local market condition – If you are searching for a home in a different state than where you reside now using a local agent there may not be in your best interest. Think about it. Will your local agent know the good and bad parts of town, what the school district is like, what the neighborhoods are like, and so on and so forth? In order to learn about everything you need to know, you need a realtor that lives in the area and is an expert in their field.