Tax Returns Guide for Real Estate Agent/Professionals

Gone are the days when you had to be worried because it is that time of the year; tax time! Times have changed and there are so many experts to help you with all your tax returns. Our tax consultants have been working with a wide range of clients including real estate professionals. Just like all other forms of businesses, all you need to do is work out the specific expenses and applicable deductions when lodging your tax return. The beauty of engaging a professional tax expert is the fact that they will work with you to ensure you have maximum deductions.

If you are a real estate professional, you will need to access your income statement. This will have the details of the sources of incomes including salaries, wages, bonuses and allowances. The income state is available for every financial year and this is necessary to be able to compute the actual tax payable.

There are certain tax deductions that you can claim for expenses that have been incurred in the year. However, these are expenses that specifically relate to the services or products that relate to your work. In addition, the deduction should be paid by the professional and not reimbursed by the employers.

Tax Deductions Claimable by Real Estate Professionals

Some of the key deductions you can claim if you are in the real estate profession include:

  • Advertisement Costs

Advertising is an integral part of the real estate business. As such you will claim the cost of advertising through signage, letterbox drops, newspapers and others. However, you can only claim this cost if you earn through commissions and not a fixed salary.

  • Motor Vehicle Expenses

Real estate professionals move around for their work. If you have to drive to an open house, to show clients a new house, visiting clients or even sites, you can claim this cost. However, the cost of driving from your home to work and back is not claimable.

When claiming motor vehicle expenses where the kms are more then 5000kms you could claim the following expenses: Motor vehicle depreciation, lease, fuel, Rego & Insurance, Repairs and maintenance, cleaning, etc.

When claiming less then 5000 kms a set rate is used and no receipts are required only an employer authorized diary.

  • Work Clothing

If your workplace has a specific uniform that is compulsory to wear while at work and has a logo, you can claim the cost of purchasing, cleaning and repair. This does not apply to common clothing like blue shirts and pants; it needs to be clothing that identifies you as an employee of the company. 

  • Self-education Costs

As a real estate professional, you can claim self-education costs which include the costs of attending conferences and training. However, these need to be related to your work.

  • Customer Incentives

Property managers and salespeople strive to keep their customers happy. If you earn through commissions, you can claim the costs of buying gifts for your customers. The incentives need to be related to your work.

Some other miscellaneous deductions are Phone usage, Internet, Travel Interstate, Seminars, Travel by Taxi, Property Books magazines & Journals, Sun glasses if working in the sun for auctions etc., Stationary, laptop.

Essential Records to Keep for Tax Deduction Claims

As you may be aware, the ATO is very keen on support documents when one is making any tax deduction claims. If you are in the real estate industry and have plans to claim for expenses that relate to your work, ensure that you have records. You can have digital or physical copies of receipts or invoices. These documents need to show the suppliers name, nature of item purchases, price and the date. When compiling your tax return, it is important to ensure that you are careful. You should try to be as accurate as possible as the ATO will verify most of the information provided.

Get Help from the Best Tax Experts

If you are in the real estate business and need help lodging your tax return, Accurate Business & Accounting Services can help you. Contact us and let our knowledgeable tax experts help you with your tax return and deductions. 

Also Read:

Tax returns guide for property investors in Australia