As a Real Estate agent, you spend an enormous amount of time in your car driving for business purposes. Whether you are driving a client to 6 different houses on a Saturday morning or going to pick-up donuts for your open-house, your driving is actually eligible for a significant tax deduction. The IRS provides a per-mile value for driving your vehicle for business. This value can add up very quickly and be worth tens of thousands of dollars in tax deductions.
In 2019 the IRS will provide 58 cents per mile for business miles driven (up from 54.5 cents in 2018) for business purposes. Let’s say Sally is a broker with 4 clients looking for property in the month of June. Sally calculates that she drives (on average) 82 miles per day between properties and meetings that are work related. An open-house here. A broker-sponsors lunch there. A trip to Kinkos for color copies. A drive-by of a potential ‘pocket-listing’ property. These miles add up quickly.
At an average of 82 miles per day, approx 300 days a year, Sally puts in 24,600 miles on her vehicle in a year. At $.58 per mile, Sally can claim $14,268 in tax deductions on her taxes. You may drive significantly more (or less) – but you can easily see how this tax deduction is extremely valuable to a successful real estate agent’s bottom line.
So what does a real estate agent need to claim this valuable tax deduction on their taxes?
To take the IRS Schedule C tax deduction, you need to document the mileage driven for business. This needs to be an IRS compliant format log that contains the following information:
- Date of each trip
- Mileage driven for each trip (roundtrip okay)
- The location for each trip (general “Atlanta Area” okay!)
- The business purpose of each trip (ie: “House Showing” or “Driving Client”)
It is important you have a mileage log in your records when you file your taxes – as you are required to indicate to the IRS when submitting your taxes that you have a mileage log in your possession when taking this deduction. ExpressMileage makes it extremely easy for real estate agents to quickly make a IRS compliant log that will satisfy this condition and be available should you ever (God forbid!) be audited.
Speaking of audits – ExpressMileage has helped thousands of customers (including many real estate agents and Realtors) pass audits. Our mileage system has been designed to meet the stringent requirements of the IRS and have been reviewed by IRS audit experts to insure they are compliant.
All real estate agents should be sure they take the standard mileage deduction and be awarded the valuable deduction they have earned by driving to support their business goals. ExpressMileage can help you make a mileage log in a matter of minutes! Getting started is easy – just click the button!
