Real Estate Agent Tax Deductions: Fill & Download for Free

Not sure if you want to leap into real estate investing just yet? Hesitate any longer and you’ll be missing out on the numerous benefits of investing in real estate.Just as in any other industry, getting started in real estate has its risks and even a few disadvantages. Yet, so many people choose a real estate investment career over every other form of cash investment. The reason is simple: the advantages of owning investment property outweigh any of the disadvantages.So, what are the benefits to having a real estate career?Benefits of Having a Real Estate Career: Reliable and Steady Cash FlowThere are only a few industries out there which promise a consistent demand and can, therefore, offer reliable and steady cash flow. Real estate investing just happens to be one of them. People will always need a place to live, and when owning investment property, you are providing this service. With the right investment property, a real estate investor can have positive cash flow. This positive cash flow can go right into the real estate investor’s pocket, be used to increase the value of the real estate investment, or even go into funding and maintaining other investment properties.Many successful real estate investors are even able to achieve passive income from this positive cash flow properties. A long term real estate investment with the right tenants, for instance, can eventually make passive income for a house investor. Either that or a real estate investor can choose from a variety of different passive income investments: REITs, real estate syndication, real estate crowdfunding, etc.Benefits of Having a Real Estate Career: Tax AdvantagesWhy does it seem that a house investor is somehow always making more money than everyone else? Well, one major reason is the tax benefits of investing in real estate. The tax benefits of real estate investing include a wide range of tax deductions for rental property expenses as well as depreciation.Benefits of Having a Real Estate Career: LeverageAnother reason real estate investors seem to make more money than other investors is leverage. The ability to leverage the money of others allows a house investor to make a greater return on investment. Let’s compare the return on investment with that of a stock investment which would require a 100% cash investment:A stock costs $100,000, which the investor pays in full. Within a year, the stock has made $20,000. The return on investment would be 20%, a pretty good return on investment.An investment property in the real estate market costs $100,000. A typical mortgage covers 80% with a down payment of 20%. The house investor pays $20,000 of his/her own money for the investment property. Within a year, the rental property has made $20,000. The return on investment? 100%. No comparison really. While this is all hypothetical, leverage will still lead to a better return on investment every time.Benefits of Having a Real Estate Career: Real Estate AppreciationAll the while a house investor is making positive cash flow and even passive income, he/she is benefiting from the rental property in another way: real estate appreciation. As time passes, the value of a rental property is bound to increase, whether the house investor forces real estate appreciation through repairs/renovations or simply holds on to the investment property. Real estate appreciation allows a house investor to get a great return on investment upon selling, and little work may be involved in the process.Benefits of Having a Real Estate Career: InflationInflation is a term which most fear, well, except real estate investors. Possibly one of the best reasons to invest in real estate is because it provides what is called a “hedge against inflation.” Basically, real estate investors aren’t negatively affected by inflation. As inflation occurs, rents go up, real estate appreciation occurs, and a real estate investor reaps the benefits. At the same time, fixed mortgage payments don’t change, and cash flow only increases for a house investor in case of inflation. Just another way real estate investors are making more money than everyone else!Benefits of Having a Real Estate Career: ControlThe last of the benefits of investing in real estate is how you can control your success when investing in property. Not only is the real estate market pretty stable, but there are so many factors in the hands of the real estate investor that affect the success of a rental property. Choose the perfect location and the right investment property, find the best tenants, force appreciation, etc. All of these decisions are made by you.

You can’t blame Obama on Bush’s economy. That would be nonsensical. It would be like blaming Lee Harvey Oswald for assassinating Lincoln.Under the Clinton administration, some moves were made that planted the seed of the housing crisis. But there was a lot of blame to go around. Here’s a partial list of the culprits, from FactCheck.org:The Federal Reserve, which slashed interest rates after the dot-com bubble burst, making credit cheap.Home buyers, who took advantage of easy credit to bid up the prices of homes excessively.Congress, which continues to support a mortgage tax deduction that gives consumers a tax incentive to buy more expensive houses.Real estate agents, most of whom work for the sellers rather than the buyers and who earned higher commissions from selling more expensive homes.The Clinton administration, which pushed for less stringent credit and downpayment requirements for working- and middle-class families.Mortgage brokers, who offered less-credit-worthy home buyers subprime, adjustable rate loans with low initial payments, but exploding interest rates.Former Federal Reserve chairman Alan Greenspan, who in 2004, near the peak of the housing bubble, encouraged Americans to take out adjustable rate mortgages.Wall Street firms, who paid too little attention to the quality of the risky loans that they bundled into Mortgage Backed Securities (MBS), and issued bonds using those securities as collateral.The Bush administration, which failed to provide needed government oversight of the increasingly dicey mortgage-backed securities market.An obscure accounting rule called mark-to-market, which can have the paradoxical result of making assets be worth less on paper than they are in reality during times of panic.Collective delusion, or a belief on the part of all parties that home prices would keep rising forever, no matter how high or how fast they had already gone up.Who Caused the Economic Crisis?

First off I am not an accountant.I am a real estate agent, house flipper, landlord, and blogger. I just talked to my accountant today about the tax code. There are many things to consider as an agent.Some agents like myself run my business as an S corp. I have employees and many agents on my team. The new tax law added a 20 percent reduction for S corps and LLCs, but excluded the service industry. Real estate agents may be part of the service industry, but my accountant said that was not clear yet. There are also limits on that deduction based on wages you pay people, and investments you have. For my flipping, rentals, and blog I will get the 20 percent deduction because they are not considered part of the service industry.The tax brackets changed:If you are making more than $19,000 you will pay a lower overall tax, but there is more to it.3. The personal exemption is gone which allowed a $4,000 deduction. The standard deduction doubled. State and income tax deductions are capped at $10,000. Car deductions almost doubled. How much tax you pay will depend on your personal situation, family, income level, deductions, etc.Overall real estate agents will not see a huge drop in taxes from my viewpoint unless they operate in a pass through corp and are not considered part of the service industry. That is something to figure out with your accountant.For me, this drops my taxes a ton as it is very real estate investor friendly.How Will the New Tax Law Affect Real Estate? - Invest Four More