Tax Tips for Real Estate Agents

The boom of the real estate market can be enticing to newcomers. Make sure you follow these tips as you enter the business to make sure you make the most of your time and money.

General Tips

  • Meet an accountant: an accountant will tell you what documents to keep and for how long. They’ll be able to answer all your questions and help you with claiming tax deductions you might have not otherwise known about.
  • Organization: Organization is a good idea for everyone, but especially if you run a business. Consider getting online accounting software to keep track of everything.
  • Separate business bank account: This is a no brainer but you should always have separate business and personal bank accounts. It makes keeping track of the different kinds of expenses easier and it makes things cleaner for tax purposes.
  • GST/HST: The GST/HST you collect throughout the year doesn’t actually belong to you- it all has to be paid back to the CRA. We recommend putting it all aside in a separate account so you don’t have to scramble at the end of the year.

Deductions and Write-Offs

  • Standard Expenses: All the standard expenses such as advertising, promotions, and meals can be deducted from your business taxes. Double check on how much you can claim for each expense.
  • Commission Rebates: Commission rebates are 100% deductible for real estate agents.
  • Real Estate Tuition Courses: Real estate courses are deductible and can be claimed either as a tax credit or an expense. Factors such as whether you have your license or how long it’s been impact which way you should claim these courses. Talk to your accountant to make sure you are claiming it the correct way.
  • Vehicle GST/HST: The GST/HST on vehicle purchases can all be claimed. If the vehicle is sued 90% or more for business purposes all of it can be claimed but if it is used for less than 10% none of it can be. There is a certain formula used to calculate GST/HST claims if you call somewhere between.

The real estate market can be tough and stressful. Hopefully these tax tips, deductions and write-offs can alleviate a little stress and save you a lot of money. Talk to an accountant before filing to make sure everything is correct and up to the CRA standard.



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