E-learning is a growing industry that is anticipated to grow multi-fold when compared to traditional classroom learning. Its impact can be felt in a range of industries, including real estate. E-learning allows experienced real estate professionals to teach and offer course material to limitless students. Teaching real estate courses online has created an additional revenue stream for realtors seeking stability in an industry that can be feast or famine.
E-learning is a relatively new industry. If you are a real estate agent looking to teach real estate courses online, you may have questions about how to record your income, your tax responsibilities, and what things you might deduct come tax time.
E-learning Bookkeeping Fundamentals
The revenue and expenses generated by your e-learning course should be recorded in the same way that other businesses track their income and expenses. Credit and debit entries should be divided into five basic types of accounts:
- Assets- These are usually the things of value that your company owns, such as electronic devices and materials purchased to teach your class.
- Liabilities- This is what your company owes to suppliers. For example, if you took out a loan to purchase computers or recording equipment for your class, this outstanding loan is a liability.
- Revenue or Income- This is the money that will flow into the company when students purchase your online course or materials for the course.
- Expenses- This is the money that will flow out of your business to cover web hosting, Internet service, SEO for your website, etc.
- Equity- This is the remaining value of your company once all of your liabilities have been subtracted.
All the above-mentioned information makes up your general ledger. Your online real estate course business may not have the same bookkeeping process as other courses. Still, the above-mentioned accounting methods are common throughout most businesses.
Identifying Deductions for your Online Real Estate Courses
It can be exciting to watch the number of students attending your class grow. It can also be disheartening to get nailed with taxes at the end of the year. You may mitigate some of your tax responsibility by reinvesting some money you earned into your company.
Depending on how you structure your business, simple things like trips to the post office, the electric bill for your home office, and coffee for your home office might be deductible so long as you report them in your small business accounting records.
The following are some categories to consider:
Home Office: If you teach your classes from home, you may qualify for deduction based on the percentage of your home that’s devoted to doing business. The IRS requires that the work area is only used for business, that it is your principal place of business, and that the majority of the time you spend in your homework area is for business. Our accountants at Fusion CPA can walk you through the IRS guidelines to make sure you are not missing any deductions for your home office space.
Advertising: Whether it’s using a search engine optimization expert, designing or updating your website, or creating a social media advertising campaign, the cost of advertising is deductible. This includes the price of putting advertisements online or in the newspaper and the fees you pay for having an ad designed and written.
Web Hosting and Domain: You cannot teach an online real estate course if you don’t have an online presence. For this reason, your domain and web hosting are tax-deductible. If you purchase stock images for your site or purchase other tools or services, these are also tax-deductible.
Choosing an Accounting Solution That Works for You
Fusion CPA offers financial adviser and CFO advisory services to entrepreneurs like yourself who are building a business around e-learning. Our services include helping you create tax planning strategies tailored to meet the needs of your business. We offer full-service bookkeeping and financial planning. We can work with you to help you identify ways to reduce expenditures, minimize tax liability, and plan now for future growth and financial stability. Are you in the preliminary stages of teaching real estate courses online? Or do you have an established online presence and want advice on financial steps to take moving forward? You can learn more about our services by clicking the button below to schedule a complimentary discovery call today!
This blog article is not intended to be the rendering of legal, accounting, tax advice or other professional services. Articles are based on current or proposed tax rules at the time they are written and older posts are not updated for tax rule changes. We expressly disclaim all liability in regard to actions taken or not taken based on the contents of this blog as well as the use or interpretation of this information. Information provided on this website is not all-inclusive and such information should not be relied upon as being all-inclusive.