With the holiday season upon us and America deep in shopping mode, now is a good time to consider whether buying equipment or supplies for your real estate business might help lower your taxes for 2014. The federal tax code allows you to immediately deduct the cost of business-related purchases, which could help you reduce your taxable income—but to decide whether it pays to buy those things now or wait until next year, you need a clear understanding of your tax situation. This is one reason why it’s a good idea to meet with a tax advisor for a final meeting before 2015 begins.
NAR tax analyst Evan Liddiard recently sat down with Peter G. Baker, CPA, of Business Planning Group in Washington, D.C., to talk about the benefits for real estate agents of a year-end meeting with a tax professional. In addition to discussing how incurring business-related expenses can help improve your tax picture, Baker talks about the importance of knowing what your commissions for the year will be, the value of keeping good records and how the self-employment tax differs from income tax.