ATO real estate tax deductions to remember

Real estate agents have countless work-related tax deductions that they’re entitled to. Car repairs and petrol costs, advertisement allowances, phone and internet charges, and many many more.

Seeing as how tax laws aren’t exactly easy to wrap your head around, and there are so many different deductions that you have to remember, it’s only natural that you overlook a few real estate agent tax deductions that are actually pretty important.

In order to help you, we’ve put together a list of the five most easily forgotten tax deductions in real estate that you should keep an eye on from now on.

As with every aspect of the tax system, it’s also important to remember that precise record-keeping is crucial, since most of the conditions for the deductions are incredibly specific as to what is and what isn’t considered an income and work-related deduction.

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1. Educational programs

If you’re taking a self-education course that’s related to your current job, then you’re entitled to certain tax deductions to the fees for that particular course.

In order to be eligible for the tax deductions, you need to prove that the course you’re taking will improve skills that will be valuable in your current profession, and that these improved abilities may potentially result in a pay raise or a better position in the company.

Keep in mind that the deductions don’t apply to courses that are only superficially related to the work that you’re currently doing, or are meant to enable you to gain new employment.

Additionally, if you have a scholarship, you’ll need to fulfill all of the grade point average requirements and follow all of the rules laid out by the provider in order to continue to be a taxable bonded scholarship recipient.

Also, remember to never throw out the receipts and keep accurate records of your course fees, textbooks, stationery, and other essential purchases, or you might not get the tax deduction.

You might also want to remember that the car expenses for the commute from your home or from your work to your place of education are tax-deductible. However, you can’t claim the cost of the last stage of your travel if you’re going from your home to your place of education and then to work, or vice-versa.

2. Equipment used in advertising

If all of the finances that you spend on the advertisement of a property are reimbursed by your company, and you aren’t a real employee who’s entitled to a commission, then you can’t include the reimbursement as income in your tax return or claim a deduction for the advertisement costs.

However, if during the advertisement you had to use equipment such as a camera, which wasn’t provided by your employer, then the costs of purchasing the camera are tax-deductible. More precisely, if you spend less than $300 on marketing equipment that you exclusively use for work, then you can claim the full cost of the item. However, if it costs more than $300, you can only claim a depreciation deduction.

You can also claim a deduction for the repairs of any and all tools that you exclusively use for work-related purposes. While this does also apply to items that you use both for advertisement, as well as personal purposes, you can only claim the work-related portion of the uses in that situation.

3. Laundry costs

Certain companies will have shirts or jackets with the logo of the company printed on them. These sorts of uniforms help emphasize the company’s professional image and reassure the customers that they’re in the hands of people that know what they’re doing.

But, regardless of the purpose of the uniforms, as long as you’re mandated to wear any garb while at work, you can claim the laundry costs of the clothes as a deduction.

The calculations for how much you spent on the water and the electricity to use your washing machine are down to you to add up for yourself. If the total cost of the laundry is under $150 you don’t have to keep records, but you’ll still be required to explain the logic behind your calculations.

An important stipulation is that the laundry costs that will be covered are only for articles of clothing that were provided to you by the company. Meaning that if you’re required to wear a certain colour of pants and a certain type of shoes as part of your uniform, but they weren’t issued by your employer, then they’re still considered part of your civilian attire and the laundry costs for those aren’t deductible.

4. Items used as gifts and for property presentation

Part of your job as a real estate agent might be to make a property look more presentable or welcoming for potential tenants. This is usually done when you have an open house and you feel like the look of the unit would be enhanced by adding a few flower pots around the property.

Another thing you might do on your job is going to be sending the occasional gift to a tenant, owner, supplier, and so on. This can be anything from a simple thank you card to a more elaborate fruit basket or some sort of bottle of wine that’s meant to show how much you appreciate their business.

Both the gifts and the decorations are tax-deductible items, but only if you’re an agent that’s entitled to earn a commission. If you aren’t, and the costs were reimbursed in their entirety by your employer, then you can’t claim a deduction for them.

5. Filing your taxes

The most overlooked real estate agent tax deduction is without a doubt the deduction that you’re entitled to for preparing and lodging your tax returns. While a lot of people do know about this, even a few of them don’t quite know all of the possible deductible expenses.

All of the tax reference materials you buy and any tax return preparation courses you take are deductible. The expenses for buying software that will help you complete and lodge your tax returns are deductible. The costs of obtaining tax advice from a recognised advisor, and even the travel costs for getting to the tax adviser are deductible.

All you need to do to receive these particular tax deductions is make sure that your books are in order. If everything is organized properly, and the costs are exactly what you say they are, then there’s no reason why you shouldn’t be approved to receive the deductions.

Recap:

  • Self-education courses are tax-deductible as long as they’re for the purposes of advancement in the job that you currently hold, rather than for use in finding new employment.
  • The costs of purchasing and repairing work-related items can be tax-deductible as long as those same items are exclusively used for work-related purposes, or otherwise only the portion you use for work can be deducted.
  • Laundry costs for washing company uniforms are tax-deductible, but laundry costs for washing mandatory items of the clothing items that weren’t provided by the company aren’t.
  • You can claim a tax deduction for gifts and property presentation items, as long as you’re entitled to a commission or you weren’t reimbursed for the expenses.
  • Filing your taxes is a deductible expense, as long as you keep detailed enough records to substantiate all of your claims

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