December 31 is only 6 days away, which means we have only 6 days left in which to make purchases that will reduce our 2018 Income Tax liability.
So what does YOUR business need in the first Quarter of 2019?
- Is it equipment, like a new printer, a new computer, a new camera, or a new cell phone?
- Is it print materials, like signs or business cards?
- Is it a new or updated agent bio?
- Is it more pages for your website – like expanded buyer and seller advice, or perhaps a community page or two?
- Is it prospecting letters?
- Maybe it’s even a new car.
Whatever it is, if you can afford to buy it by December 31, it will help keep money in your pocket on April 15.
Now is the time to look at this year’s income, add in any commissions due before the end of the year, and deduct your expenses so far. Does the number put you near the cut-off point between tax brackets? If so, spending a few hundred now could save you plenty on tax day.
Here are the tax brackets for 2018:
The median annual income for a REALTOR® is $44,500, and since every agent has some business expense to deduct, spending a few hundred or more right now could move you from the 22% bracket down to 12%.
Look at the difference.
12% of $38,700 is $4,644.
22% of $38,701 is $8,514.
That’s nearly $4,000.
So think about what you need, and take the time to review your tax status before it’s too late to make those last-minute deductible purchases.
If it’s prospecting letters, I can help you with either pre-written or custom letters. I’ll also help with a new or updated agent bio, community pages, buyer or seller pages, or any other written material you may need to promote yourself and your business in the new year.
Whether you’re in the 12%, 22%, or 24% bracket this year, your tax-deductible purchases will reduce your bill come tax time. Purchases made in January will be deductible on next year’s taxes, but considering the time value of money, isn’t it wiser to save now rather than in 2020?
One more thing: Remember that gifts to your employees and customers are also deductible.
According to the IRS website, you can deduct up to $25 per customer, plus the cost of wrapping and/or shipping.
Happy New Year courtesy of Stuart Miles @freedigitalphotos.net
Gift Box courtesy of Master isolated images at FreeDigitalPhotos.net