How Much Is Capital Gains Tax on Real Estate? Plus, How To Avoid It

turbo tax for real estate agents

How much depends on the square footage and usage of your office space. If you have your own policy—one not covered by your brokerage—you can deduct it. If you are self-employed or an independent contractor, you’ll need to make quarterly tax payments, declaring your earnings throughout the year. Also, my next audiobook will be the BiggerPockets tax strategies book.

turbo tax for real estate agents

Additionally, you can deduct real estate taxes necessary for your business, and self-employed individuals receive an income tax deduction for half of self-employment taxes. For the filing itself, you can either hire an expert accountant or use tax software. One of the best tax software for real estate agents is Realtyzam. This powerful accounting platform turbo tax for real estate agents is built specifically for real estate professionals. It uses advanced automation and streamlines processes so that accounting and tax filing can be handled quickly and accurately. Generating your quarterly or year-end tax report takes less than 10 seconds. Been acquiring rental properties over the last 3 years and still get by with TurboTax.


Through the 1040-ES form, you’ll report your estimated tax, which is important for self-employed agents. This form covers any taxes that are not automatically withheld. Don’t overlook all the supplies you have to buy for your office. All of those pens, pencils, and paperclips can certainly add up to hundreds of dollars – and these business expenses can certainly be deducted from your tax bill. Investing money in marketing and advertising is essential to stay competitive as an agent. All of that also takes money, which means significant tax write-offs. Always meet your tax deadlines to avoid penalties.

  • Learn how to file taxes as a real estate agent and follow these tax tips so you can file with ease as a self employed individual.
  • Fees apply if you have us file an amended return.
  • The Nextdoor Editorial Team is dedicated to telling stories of local businesses, providing product education, and sharing marketing best practices to help businesses grow.
  • Here are a few useful resources to help real estate agents navigate the world of income tax.
  • He goes on to explain that those who are paid to perform other duties outside that of being a licensed real estate managing broker, may be deemed an employee and as such should be on the payroll.
  • Knowing the best realtor tax deductions can help you keep the right records throughout the year and make the most of your deductions come tax season.

However, married couples who earn between $80,801 and $501,600 will have a capital gains rate of 15%. Those with incomes above $501,601 will find themselves getting hit with a 20% long-term capital gains rate. For single folks, you can benefit from the 0% capital gains rate if you have an income below $40,400 in 2021.

Build Your Business While Earning a Tax Write-Off

There are certain limits to the type of vehicle that qualifies for this tax break, however, as well as limits to the amount of the allowable deduction. Can you deduct the cost of the interior & exterior furnishings, large and small appliances, housewares, etc. being used by the tenants? I’ve been told that you can also expense items based upon policy and dollar value. For example, my CPA was telling me I had to depreciate a $900 hot water heater over 27.5 years. We all know you’re lucky to get years and now I’m being told that the low value (e.g. below $1K) could be a trigger for deducting the entire amount. Another CPA told us to have a “policy” that anything under X would be written off. As long as you qualify for the deduction as described above, you can simply deduct $5/SF up to 300 SF.

turbo tax for real estate agents

We’ll search over 500 tax deductions to get you every dollar you deserve and help you uncover industry-specific deductions. Owning Rentals comes with so many benefits and having able to write off most of the rental property expenses from your rental income is actually great. What if your rental property is co-located on one parcel of land with a primary residence. How does this affect deductions like landscape, a new fence, driveway repair, boat dock, etc?

Tips for Filing Taxes as a Real Estate Agent

Pricing is $69 for a federal tax return, with state returns priced at $39 each. TurboTax is touted as America’s #1 brand of tax software for landlords to use for federal and state income tax returns each year. This tax preparation software works with the Windows, Mac, Android, and iOS operating systems and is a direct competitor of companies such as TaxAct and H&R Block Tax Software. After settlement on a property, the employing broker issues you a check for your post-split commission. Unlike a W-2 employee, a real estate agent does not receive a pay stub detailing tax withholdings with this check, because there are no taxes withheld on 1099 income.

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