REPTaxes Expenses

Below is a list of professional expenses commonly incurred, and deducted, by realtors. Remember, to be deductible, an expense must be both "ordinary" and "necessary" in connection with your profession.

Item	IRS PUB	Deductible	Non-Deductible
Advertising expenses		The money spent to advertise a property, or to purchase give-aways.	The value you put on your time spent showing homes and working open houses.
Automobile expenses	917	The portion of automobile expenses incurred while driving between two different workplaces, or between your principal residence and a temporary job site. You can base the deduction on actual expenses incurred or on the standard mileage rate of $.445 per mile for 2006, increasing to $.485 per mile for 2007.	The portion of automobile expenses incurred while commuting between your principal residence and a regular place of business.
Beepers and pagers	529	The rental fees paid by you for beepers and pagers used in connection with your employment.	Any costs associated with the personal use of these items.
Cellular phones	534	The business portion of the cost of the cellular phone can be expensed. Plus, you can deduct the business use portion of the monthly cellular phone bills.	Any portion of the cost of the cellular phone and the monthly cellular phone bills relating to personal use.
Computer purchases	534	Depreciation on the business use percent of any computer or peripheral purchased (1) as a requirement of your employment and (2) for the convenience of your employer.	Any computer and peripheral not specifically purchased as a requirement of employment or for the benefit of your employer.
Education, examinations and licenses	508	Expenses incurred that are required as part of your employment and maintain or improve your skills in your current profession.	Expenses incurred that prepare or qualify you for a new trade or business, including taking classes to obtain your initial real estate license.
Gifts to Clients	463	Gifts with a value of less than $25 given to clients to congratulate them on the purchase of a new home.	Birthday and wedding gifts given to colleagues and potential or former clients.
Home office	587	The percentage of your home (based on square footage) used regularly and exclusively in connection with your profession. Great for renters since rent isn't otherwise deductible on your federal tax return.	The portion of your home used for any non-business purpose during the year, even if just for one day.
Insurance	529	Errors and omissions insurance and insurance on business assets.	Health, life and disability insurance. Health insurance is deductible as an "adjustment to income" if you have net self-employment income.
Interest on school loans	535	Up to $2,500 of student loan interest paid during the year, subject to income limitations, is deductible as an "adjustment to income".	Interest on school loans in excess of $2,500 per year.
Job search	529	Expenses associated with finding a new position in your current trade or business.	Any expenses associated with finding your first job, or a job in a new trade or business.
Meals and entertainment	463	50% of the cost of a meal when there is a specific business purpose in connection with the meal, or while temporarily traveling on business.	Personal meals, including meals while working within the general vicinity of where you live.
On-line Services	463	Internet access, website design and maintenance, and other on-line tools to help you in your profession.	Personal e-mail accounts, and other personal use of the internet.
Parking and tolls	463	Parking and tolls incurred in connection with traveling between two different workplaces or between your principal residence and a temporary job site.	Parking and tolls incurred in connection with commuting between your principal residence and a regular place of business.
Professional dues, licenses and subscriptions	535	Fees paid to join professional organizations or to subscribe to their journals.	Dues paid to social or athletic clubs.
Printing and postage	535	Amount paid to have brochures and other marketing materials printed and mailed.	Postage spent on printing and mailing personal items.
Supplies	535	Supplies, such as give-aways and snacks for an open house, or toner cartridges and paper for your computer.	Supplies that don't fall within the definition of "ordinary" and "necessary" for a professional in your field.
Travel and lodging	463	Travel and lodging expenses incurred while outside the general vicinity of your residence in connection with a deductible activity.	Travel and lodging incurred when the primary purpose of the trip is not business related.
Uniforms and cleaning	529	The cost of purchasing and cleaning clothing, such as company shirts and jackets, required by your employer that isn't considered "everyday street clothing".	Items such as suits, shirts, shoes, ties and wristwatches because they fit the description of "everyday street clothing".

IRS Pub indicates the IRS Publication that contains information on this topic. You can access the IRS Pubs at www.irs.gov.

How you deduct your allowable unreimbursed professional expenses depends on how you were compensated during the year: