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Every year, millions of dollars in Internal Revenue Service (IRS) deductions go unclaimed. From travel costs to online marketing expenses, many Real Estate agents spend thousands of dollars conducting and marketing their business then fail to write those expenses off. It’s not that agents don’t want that extra money in their pockets—they simply don’t know about them or don’t know how to claim them.

Savvy Real Estate agents understand that tax considerations are an important part of how they conduct their day-to-day business operations. Understanding what can and cannot be deducted helps agents understand where to spend money, how to structure their transactions, and what records they need to keep. After all, the amount of money an agent pays in taxes is a key factor in making his or her business profitable.

As a Real Estate agent, you’re entitled to claim every expense and write-off the law allows. If you fail to do so, that’s money you’re basically throwing away. In today’s economy, ignoring important deductions can be detrimental to your business.

Below, you’ll find a list of the most commonly missed or underreported deductions in the Real Estate industry. To ensure that you’re taking advantage of every deduction in a legally appropriate manner, consider having an accountant or other certified tax preparer help you with your taxes. While you’ll pay a fee for their services, it’s a tax-deductible fee.

Personal Property Deduction
Any personal property purchased for use in your business can be written off. This includes computers, cameras, printers, fax machines, cell phones, desks, office furniture, lamps, and more. In the past, tax laws required business owners to depreciate the cost over the life of an asset, but this is no longer the case. Today, you can expense the entire purchase price when you buy it.

Travel Expenses
Did you travel to New York for a Real Estate convention? Did you take a cab while you were there? If so, you can write off any expenses incurred during your trip, including airfare, transportation costs, meals, telephone calls, and business-related entertainment. You can even write off tips and laundry costs.

Tax experts warn that travel and entertainment deductions are more likely to be scrutinized by IRS officials than other types of deductions. However, as long as your expenses can be substantiated by evidence like diaries, logs, receipts, paid bills and expense reports, you have little to worry about. To be on the safe side, document the place, time, date, amount spent, and any other relevant information for each expense.

Home Office Deduction
Many Real Estate agents today work from home on a regular basis, using a portion of their home to conduct business. This is a legitimate write-off in the eyes of the IRS. Not only can you deduct the portion of your home used for your business, you can also write off a percentage of the utilities, repairs, maintenance and depreciation of the home.

There are a few rules to this one. For starters, the area that you write off must be used exclusively for business purposes. In addition, you cannot have another off-site office location where you conduct business. If you occasionally work at your brokerage office, you must spend most of your work time in your home office for it to be considered the principal place of business.

Mileage
As a sole proprietor, every mile you drive on behalf of your business is deductible. Keep detailed records of these miles for each tax year, and be sure to write them off at the end of the year.

Online Marketing
Any expenses related to online marketing, including domain registration and regular Web site hosting costs, can also be claimed as deductions. Even Web site software fees (such as Dreamweaver or Photoshop) can be written off.

In addition, if you spend money on Google AdSense and similar programs, it is likely that you needed to provide your tax information when you signed up for the service. While most programs do not withhold taxes, they’ll send you a 1099 if you earned a significant amount of money. Because you’ve spent money on these programs to earn that money, be sure to deduct any expenses related to researching and building your program.

Similarly if you promote your business through traffic exchanges and you pay for upgrades, these are also tax deductible. Membership fees for any sites related to your business are also deductible. For example, if you pay $25 per month to market your Web site or home listings through a service or another site, you can deduct those fees. If you buy Web site templates and graphics for your business site, these costs are also deductible.

Taxes will never go away. But by writing off every deduction you're entitled to, you can help increase your business’ bottom line and overcome this financial downturn.

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