Are you a real estate professional looking to optimise your tax deductions? Understanding what expenses you can claim can make a significant difference in your financial picture. In this guide, we'll walk you through the key deductions available to real estate professionals, helping you minimise your tax liability while staying compliant with the law.
When it comes to promoting your services, the costs can quickly add up. Fortunately, you can claim expenses related to marketing and advertising as tax deductions. From printing flyers to newspaper articles, these costs can be deducted from your taxable income. It's important to note that these deductions are applicable if you earn income through commissions and not a fixed salary.
Driving to open houses, property inspections, and client appointments is an integral part of your job. The good news is that you can claim tax deductions for the use of your motor vehicle in these instances. However, commuting from home to work and back is not eligible for deductions.
If your yearly kilometers exceed 5000, you can claim expenses like vehicle depreciation, fuel, insurance, and maintenance. For fewer than 5000 kilometers, a fixed rate applies (e.g., 85 cents per km in 2023-24), with no need for receipts, however the Australian Taxation Office (ATO) will ask you to explain how you estimated the total kilometers.
While you can't claim deductions for common clothing, specific work-related attire is a different story. If your clothing bears your company logo or is part of a uniform that identifies you as an employee, you can deduct costs for purchasing, cleaning, and maintaining such attire.
Investing in your professional growth pays off, and the ATO acknowledges this. You can claim deductions for expenses related to attending conferences, training, and professional courses that enhance your skills and knowledge.
Building relationships with clients often involves giving gifts. Good news: you can claim deductions for the expenses incurred when purchasing gifts for your clients. This helps you nurture your business connections while enjoying some tax benefits.
Beyond the aforementioned categories, real estate professionals can also claim deductions for various other expenses. This includes phone usage, internet costs, taxi travel, books, magazines, stationery, and even laptop expenses.
The key to claiming these deductions successfully lies in maintaining accurate records. Make sure you keep detailed digital or physical copies of all expense receipts or invoices. The ATO requires you to retain these records for five years from the transaction date or when the record was prepared or obtained.
To streamline your record-keeping process and ensure you never miss a deduction, consider using the Myaccountant App. This app allows you to track expenses, save digital copies of receipts, and attach them to expense transactions. By sharing these records with your accountant digitally, you can reduce their data entry time and ultimately save on accounting fees.
The Myaccountant App also assists with ATO's record-keeping requirements, automatically filling and submitting your quarterly activity statements directly to the ATO.
By linking your bank account or credit card, you can effortlessly track tax deductions and monitor spending, freeing up valuable time from administrative tasks.
Understanding the range of deductions available to real estate professionals can significantly impact your financial outlook. From marketing expenses to vehicle usage and beyond, taking advantage of these deductions can lead to substantial savings. By leveraging tools like the Myaccountant App, you can simplify your record-keeping process and enhance your financial efficiency.