If you are a small real estate business owner, you have a lot of options for saving money on your taxes. There are several deductibles that can be taken out of your reported income to decrease the amount that you owe. Many of these discounts are on items you use often, which can add up to big savings during tax season.

Office Costs

If you have a designated room in your home for a home office, you can deduct the cost of that space, the same way you would if you were renting office space elsewhere. You can also deduct a portion of your utilities, as well as your phone and Internet costs. The office has to be its own separate room, however. You cannot deduct the family room or dining room, for example, even if that is where you do most of your work.

Supplies

Deduct the cost of pens, paper, staplers and other office products. You can also deduct the cost of new office equipment (a printer, computer) and office furniture. Magazines, journals and books purchased for your business also count as business expenses, and can help you to save on taxes. You can count advertising materials, such as business cards, and even fuel and mileage costs for traveling for business purposes.

Outsource

If you can outsource some of your duties as a real estate agent, through hiring someone else to do basic office tasks, write descriptions of homes or even build a website for your real estate business, you can write these costs off as business expenses. Although it costs more to outsource than to tackle these tasks yourself, outsourcing allows you to get things done that you don't have the time or knowledge to do (such as Web design), while letting you focus on what you're best at. Being able to claim these expenses during tax season can significantly reduce what you owe.

Track Expenses

For each expense you plan on claiming as a small real estate business owner, make sure you have the documentation to back it up. Save receipts from office supply purchases, fuel receipts and anything else you spent money on for your business. You should also save copies of any canceled checks. Don't forget to print off invoice or receipt copies for online purchases as well. Document each expense and place the receipts in a secure location, where they won't be easily misplaced.

Stay Informed

Stay current on current tax laws and allowable deductions. It's easy to miss possible ways to save if they're new, and you don't know about them. Take your taxes to a certified accountant or visit a tax preparation company for advice, if you are unsure about the deductions you may qualify for. Doing your own business taxes, especially the first few years, can be challenging if you aren't familiar with the task, and it may be a better option to seek professional assistance.

Source:

Noobpreneur: 10 Ways to Save Money on Small Business Taxes

More Information:

Internal Revenue Service