Agent's Guide to a Pain-free Tax Season

Tax season is almost over, with mere days to go. Most of you have probably filed already or are nearing the finish line.

For you procrastinators, there's still time to get your receipts and statements in order--but just barely. At this late stage, your best bet is to file an extension and hope your CPA doesn't charge too much of a premium for last minute tax return preparation. But don't wait--the longer you put off getting information to your accountant, the more stressful even filing just an extension becomes.

If you find yourself putting off your taxes until the last minute every year, ask yourself why? Perhaps it's that your financial record keeping is less than stellar, and gathering all the documents your accountact needs is a huge headache. There's good news, though: tax season doesn't have to be painful. If you're overwhelmed every time April 15 rolls around, don't be. A little organization can help a lot!

Begin by classifying all your business expenses. Since real estate agents are considered statutory nonemployees, keeping track of expenses for tax deduction purposes is vital. Have your bank and credit card statements handy, as well as any receipts. Comb your records for business expenses. As a starting point, use the following categories to classify each expense:

• Operating Costs - These are administrative and general office expenses like desk fees, postage, web hosting charges, software fees, business cards, and more.
• Advertising and Marketing - It's as important to track your marketing expenses as it is to measure the results of every channel you market on. That way, you can make smarter decisions on where to spend your money in the future. These expenses include staging costs, open houses, flyers and brochures, pay-per-click ads, meals and entertainment, listing and lead generation services, and more.
• Professional Fees - MLS and association fees, health insurance, continuing education, business travel costs, seminar fees, licenses, and more.
• Communications - How many ways are you communicating? Your cell phone plan, internet access, email newsletter costs, and landline charges are all tax deductible.
• Equipment - You can also deduct the cost of your monthly mobile monthly service charges. If you bought a new cell phone during the 2015 tax year, you can deduct the purchase price, too. The same goes for printers, scanners, fax machines, computers, tablets, office furniture, and more.

We recommend consulting a tax professional for the best advice, of course, but this should start you off on the right foot.

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