If you want to ensure that all or a substantial portion of your next client appreciation event is tax deductible, just follow these 9 steps:
Invite your clients by sending something out in writing – a note card, flyer, post card, email, etc. Make it clear that it is not just a personal party, and that real estate is the basis for the event.
Make It Public
This needs to be an event that isn’t limited to just your clients. This is a fabulous opportunity to encourage your clients to bring a friend and offer to provide them a real estate service such as a market analysis or neighborhood report. You don’t need to invite the general public, but you do need to make the event available to some people that you don’t already know.
Keep Track Of Who Attends
Have all attendees sign a guest book or provide you with a business card when they arrive at your event.
Have Marketing Materials On Display
Have items available that connect the attendees to you as a real estate agent. This could be as simple as having flyers of your current listings and service offerings.
For an extra special touch, make it personal. Consider having pictures of the new homes your clients have moved into over the last year on a big sign, in a photo album or in a short slide show -people love to see themselves! This gives you the opportunity to congratulate them and thank them for their business.
Make a short sales pitch by sharing your real estate expertise.
Provide a quick update on the market or their neighborhood. You don’t have to make the entire event about selling real estate – but at a minimum welcome everyone, thank them for their business, ask people to consider you as their real estate professional and ask for their referrals.
Giveaways should have your name, logo or likeness permanently attached (no stickers that can come right off.) These should be marketing items that build your name exposure, not thank you gifts. Examples are pens, pads, umbrellas, hats, and shirts.
If you want to give away non-marketing items, remember that the recipient needs to be identified and the value should be below $25. Anything higher is not deductible based upon the current rules.
Keep Expenses Appropriate
Make sure that expenses are consistent with your business and don’t go overboard with the dollar value of your food and entertainment. Unless you are in the very high end of luxury real estate, limousines or private jets won’t pass muster. :)
This is the most important step. Keep the documentation for all of the items above in your tax file. Keep a sample of the invite; the guest registry/business cards collected; receipts for the food, entertainment and other event expenses; a copy of the marketing materials that were on display; a copy of your presentation, handouts and/or “speech”; a copy (or picture) of a giveaway item, and gift receipts and recipients.
by Michelle Blue