It’s that time of the year again when our financial focus turns to Uncle Sam and his affect on our pocketbooks. Real Estate licensees who work from their homes may be able to save on their income taxes.
“One of The Real Estate School’s most frequently asked questions concerns whether home offices are tax deductible,” said President Edward O’Donnell, “and in some cases, they are. Many real estate brokers who work out of their own homes are entitled to special deductions on their taxes.”
- The home office must be in a room or other area which is used exclusively to conduct business;
- The area of the home must be the principal place where a broker or sales associate conducts business (that means you don’t have another business office); and
- There is no personal use of the business office. For example, If a tax audit revealed that the broker’s children used the home office to do their homework, the deduction would likely be disallowed.
See a flow chart that can show whether you’re entitled to a home office deduction. You should also obtain professional advice from a Certified Public Accountant.
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