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ARE YOU A REAL ESTATE AGENT?
SAVE PLENTY IN TAXES!
First,
read the follow Real Estate Bulletin published by the California Department of
Real Estate.
Click Here
or visit
http://www.dre.ca.gov/pdf_docs/rebspr00.pdf. Then continue reading!
What can
real estate agents do to keep more of their money?
It is simple!
Incorporate! As a real estate agent, it is more likely that you are
considered an independent contractor rather than an employee of Coldwell Banker,
ReMax, or Nelson Shelton. Therefore, they probably provide you a 1099 at
the end of the tax year for commissions you have earned.
If your sponsoring
broker has an independent contractors agreement with you, the greatest thing you
can do for yourself is to incorporate.
A sponsoring broker
(Coldwell Banker, Remax, Nelson Shelton) may pay compensation directly to a
corporation solely owned by that licensee that has been formed for the purpose
of receiving compensation earned by the licensee. A corporation formed for
this purpose shall not be required to be licensed so long as the person who is
the sole shareholder of the corporation is licensed.
As a Real Estate Agent,
you can incorporate in order to receive compensation. The corporation itself
does not have to be licensed as long as you, the agent, are the only shareholder
and you have a valid license. You can have employees, just not any other
shareholders.
If you are
self-employed, the first $90,000 of your earnings is subject to self-employment
tax, (which is combination of social security and Medicare) which is currently
at 15.3%. With corporations, only salaries are subject to self-employment
tax. With a corporation, you can allocate a portion as reasonable salary
to yourself as an employee, and the rest as profits. As a sole proprietor,
if you earned $80,000, you would pay self-employment tax on the entire $80,000.
However, by incorporating, you may pay yourself $35,000 in salary, and
$45,000 in profits, and the $45,000 will not be subject to self-employment tax.
By Incorporating, you
can save a tremendous amount in taxes. Our firm has had experience is
setting up new corporations for real estate agents in an effort to cut their
taxes and grow their commission! We can help you as well!
Don't you wish that you had setup your corporation a couple years ago when the real
estate market was booming and you were making a ton of money? As the
market is beginning to slow down, NOW you have to think of ways to save money!
Call now for
a free consultation. You may reach our office at (310)205-5529.
Remember...Failing to
Plan is Planning to Fail!







LAW OFFICES OF ALON DARVISH
9454 Wilshire Boulevard, Penthouse
Beverly Hills, CA 90212
Tel: (310)205-5529
SERVING LOS ANGELES COUNTY
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