Nearly every expense associated with your job is a tax-deductible expense, meaning that it is a cost that lowers your claimed income — and, as a result, lowers your taxes. Even little expenses add up over time, so save receipts for any expense related to your real estate career. Filling out your forms when tax day arrives is much easier if you've kept good records all year long.

Accurate records help you monitor the progress of your business and they'll come in handy if the Internal Revenue Service ever audits your tax return. When you're audited, the IRS might ask to see proof of when an expense occurred and how it is connected to your business. The more answers you provide, the easier it is to substantiate your claim that costs are truly business related.

Some of your expenses will include:

• Advertising costs

• Auto expenses, for upkeep and miles driven

• Office supplies

• Postage and delivery

• Dues paid to business organizations

• Client gifts

• Education and training expenses

• Licensing fees

• Business travel expenses

• Entertainment (within IRS limits)

• Insurance

• Equipment

• Professional advice (attorney, CPA, tax professional)

• Payments to assistants

• Rent for office space

• Office space in your home

If an expense is related to your work, it is probably tax deductible. Your tax professional can help you determine which of your costs are valid business expenses.

The expense for your home office can create a major tax deduction in some cases. If you have an office in an office building, as well as a home office, your home office may not be deductible at all. Laws change periodically, so discuss home office requirements with your tax professional and be sure to follow IRS guidelines when you set up and manage a home office.

Making Tax Payments

Employers deduct a certain percentage of taxes from each employee paycheck and submit the funds to federal, state, and local governments as required so that by the end of the year the employee has prepaid the majority of his taxes. As a self-employed real estate agent, that is no longer done for you, so you must make periodic estimated tax payments yourself.

Plan to begin submitting monthly or quarterly tax payments when your real estate income begins. It's a lot easier to set aside and pay small portions with single checks than it is to come up with a huge chunk of money on tax day. You might also be fined for underpayment if the IRS determines you should have submitted taxes on a quarterly basis and didn't.

Helpful Software Programs

There are excellent, intuitive software programs available for people who feel comfortable preparing their own tax returns. TurboTax is a program that has been around for many years and is easy to use. You can import your computer-generated financial information into TurboTax to speed up your return and eliminate errors that occur when transferring data by hand.