As a self-employed real estate agent, you’re responsible for reporting your income to determine what you owe in taxes. So, preparing for taxes benefits your business performance because you can plan and set aside how much you’ll owe. 

When considering your taxes, you may wonder what self-employed real estate agent tax deductions there are. Tax deductions are expenses that you can subtract from your income to reduce how much you owe for taxes. Taking advantage of these deductions will help you save money on your business taxes.  

This guide will cover self-employed real estate agent tax deductions, including: 

  • Why tax deductions are important
  • What tax deductions you can claim as a real estate agent 
  • How to manage your taxes to claim your tax deductions 

Why tax deductions are important 

It may seem obvious why tax deductions are important, but you’d be surprised how common it is to miss out on them. When you’re self-employed and managing your own taxes, you’ll likely have to pay income tax, dividend tax, and national insurance. So, you’ll want to save where you can to maintain your income. If you report your gross profit and fail to claim tax deductions, you’ll pay far more in taxes than you need to. 

So, being aware of and keeping proof of your tax-deductible expenses will help you only pay what you owe. In addition, reducing your taxes can help you maintain your cash flow, which is the amount of money coming in and out of your business over a given time. Instead of putting this aside for taxes, you can use it to cover short term obligations. 

It’s worth planning ahead, so you don’t struggle to cover tax expenses. But also try to be diligent in reducing your taxes where you’re eligible. The money you save can go towards your savings or business growth.

What tax deductions you can claim as a real estate agent 

So what expenses count as self-employed real estate agent tax deductions? As a small business, you should keep proof of all of your costs for reporting purposes. But, tax-deductible expenses are only those that go exclusively toward running your business. These expenses reduce your gross income to benefit your business. 

Transportation

As a real estate agent, you’ll likely need to drive to your clients and property viewings. These transportation and petrol expenses that are necessary for your business are tax-deductible. So, make sure you keep a log of how far you drive and what you spend on transportation to deduct these charges from your taxes. 

Insurance

Insurance fees are another tax deduction to consider. For example, if you have public liability insurance, you can write these monthly charges off from your taxable income. This deduction also goes for business vehicle car insurance or any other business-only insurance. 

Marketing and advertising 

You likely have a budget for advertising and marketing to grow your business. These expenses are also tax-deductible. Marketing charges could include a range of things, like website hosting, graphic design fees, business cards, and open houses. You can also include paid ads, billboards, or signs you use to promote your property services. Just make sure you maintain precise records of your marketing and advertising costs, so you don’t have to search for them later. 

Business tools 

Business tools, such as management tools, design tools, real estate software, and accounting software, are tax-deductible. In fact, any professional service fee that is essential to or directly benefits your business operations is deductible. So, if you have professional software that you pay money towards, keep records of these payments to subtract them from your taxable income. 

These deductions also include any office supplies or equipment you have to run your business. As a self-employed real estate agent, you may work from home or rent an office space. If you pay rent towards an office, this is tax-deductible. 

Training courses 

To grow your skills, you may attend training courses for real estate that charge a fee for attendance. You can also claim these to reduce your taxes. Similarly, you can deduct any membership fee for a relevant association or the cost of attending conferences or trade shows. 

Meals for work 

Real estate agents are first and foremost salespeople. So, you may bring clients out to dinner or bring coffee to property viewings. If these food purchases are essential to your business, you can keep the receipt and claim them as tax-deductible. 

How to manage your taxes to claim your tax deductions 

To simplify your tax process and find proof of these self-employed real estate agent tax deductions, you’ll need accurate and updated financial records. The right modern accounting software will help you do this and streamline the process. 

Countingup’s business current account with built-in accounting software will help you organise and track your earnings and expenses. The automatic expense categorisation tool labels your expenses so you don’t have to. Plus, it uses HMRC approved categories, which will help you know what expenses are tax-deductible and easily find proof of them. 

The app also has a receipt capture tool that instantly reminds you to take a picture of your receipt when you make a purchase. This helps you save proof of expenses without having messy piles of receipts that you have to shuffle through later. With clear records, you’re less likely to miss a deductible expense for your taxes. 

On top of all of this, the Countingup app generates ongoing tax estimates so you can prepare for these expenses and avoid surprises. Altogether, these tools will save you time and energy on doing your real estate taxes. They’ll also help you ensure that you only pay what you need to. 

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