Tax Services, Solutions and Strategies

Real estate agents – Tax solutions

Qualified real estate agent:Agent congratulating a couple

 To be a qualified agent, the individual must:

  1. Hold a valid current real estate license.
  2. Be paid substantially (at least 90%) by commissions on sales or other services performed as a real estate agent in connection with the sale of an interest in real property.
  3. Have a written agreement with the payer stating the agent will not be treated as an employee for federal tax purposes.

 

Income-Commissions:

Qualified real estate agents are treated as self-employed for all federal tax purposes, including income and employment taxes. Required forms will include Schedule C (for self-employed individuals) and Schedule SE (to report your required self-employment tax).

 

Business related expenses:

These are expenses you incur in the course of running your business. In most cases they can reduce you taxable business income and therefor reduce you tax. It is important to take advantage of all your business deductions, these can vary from advertising to vehicle expense.

 

Vehicle Expenses:

The expense is singled out because there are special rules and requirement to be considered when taking vehicle expenses. There are rules for taking standard expense vs. taking actual expenses. Also the type of depreciation deduction will vary depending on the cost method you use.

 

Depreciation deduction:

Certain business tools and equipment cannot be deducted in one year, they must be deducted over a number of years, and this is known as depreciation. The rules for deprecation can be complex and will vary depending on cost, life of the asset and when placed in service.

 

Office in home deduction:

The rules for deducting an office your home are very strict, but some individuals do qualify.

 

Real Estate Brokers:

Real Estate Brokers work as “Broker-agents” incur the same expenses as above, Real Estate Brokers who have their own office with agents working under a broker-agent agreement may incur, in addition to the expenses as above, some more unique expenses related to running a Real estate office.

Tax Package: Realtor

  • Review of previously filed tax returns for new client only
  • Projection of this years taxes
  • Meetings throughout the year (2 meeting in May through December, 1 in January through April)
  • Filing of this years taxes
  • $350 upfront  or $100 a meeting 

 

 

Contact Us at (858) 699-1130 to schedule an Appointment

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