For every real estate professional, income is king. After all, isn’t that why you are in the game? As April 15 looms on the next page of the calendar, taxes are on the minds of many of us. As the tax deadline looms, adjusted gross income — line 37 on your form 1040 — is a key driver in a number of penalties, surtaxes and phase-outs of benefits.
Most real estate agents and brokers generate their income through commissions from their sales transactions. As a result, Tax Day is particularly important. Saving receipts and deducting business expenses are always key points to address.
As a real estate agent or broker, you usually must invest money before you make money. Normally, you have to market a property before you can sell it, promote yourself to attract homebuyers and sellers, and drive around town quite a bit before you see the fruits of your labor in the form of a commission check.
Throughout the year, it is important to track every deduction. Keep records and files of all expenses. Often, it is wise to maintain a separate business checking account.
When it comes time to pay taxes, nobody wants to open their wallets to Uncle Sam. However, there are ways to keep more of the money you worked all year to earn.
The tax code is littered with assaults on adjusted gross income, and inducements such as education or adoption credit or tax-deferred IRA will be dangled, then snatched away if your adjusted gross income is too high.
As you do your taxes and you start to see red, you undoubtedly will start to look for ways to reduce your adjusted gross income and cut your tax. Inspired by a report put out by Forbes, get your FREE DOWNLOAD, Real Estate Edition of “10 Way to Not Pay Taxes” – written especially for the real estate broker and agent. With tax time on the horizon, here’s some tips for turning around your tax situation!