Accounting and Tax Services for Realtors and Real Estate Brokers
212 Tax & Accounting Services has extensive experience working with companies & individual professionals in the real estate industry not only in Manhattan and New York City but across the United States. We understand that real estate isn’t formulaic like several other industries but it has several nuances that are only understood by people who have been exposed to the industry for several years. From working with real estate agents and brokers since our inception in 2008, we have built our real estate accounting and tax services around the unique set of compliance, financial operations, and cash flow issues that arise most often for these types of taxpayers.
As a real estate agent or real estate broker, you are generally not considered an employee for federal tax purposes. If you receive commissions from sales transactions, even if you’re working full time for a real estate firm you are considered to be self-employed. This status can actually be beneficial since you’re entitled to certain write-offs and deductions that can lower your overall tax payment.
We know it can be stressful to understand the ins and outs of self-employment taxes and deductions! You have a lot to worry about when it comes to maintaining your own business as a real estate broker or agent and that is why it is best to have a qualified CPA on your side to ensure your accounting and tax preparation are taken care of quickly and accurately to avoid any issues with the I.R.S.
Create a system for accurate recordkeeping.
Filing self-employed taxes means needing accurate records of all your expenses throughout the year. As a real estate agent or broker, sometimes you have to spend money to make money. Whether you have to market a property or drive long distances to meet a potential homebuyer, these are expenses you can write-off on your taxes.
You need to invest in a system for accurate record keeping early on to ensure a smooth tax filing process. There are free and inexpensive tools like QuickBooks which can assist with keeping track of expenses like dues to organizations, software subscription fees, equipment, and additional deductions. When it comes to filing taxes independently, it often is best to recruit the assistance and direction of a tax advisor for assistance in claiming deductions that are appropriate and legal.
Know your deductions.
The best way to prepare yourself for tax season as a realtor or broker is to be familiar with your tax deductions in advance. While most deductions are self-explanatory, some might surprise you. Reviewing what is and isn’t a valid deduction is a good way to stay on top of your accounting process. Here are the most common write-off deductions for real estate agents and brokers:
- Marketing (sales flyers, digital marketing, etc.)
- Education Costs
- Transportation Costs
- Office expenses (i.e. home office)
- Real estate licensing fees
- Client gifts ($25 deduction limit per recipient)
When in doubt about whether or not something qualifies as a deduction for your business, speak to a qualified tax advisor to review your unique situation.
Health Insurance, Retirement and Tax Planning Services.
You should choose to work with 212 Tax not only for our well renowned and reliable tax preparation skills but also for our aggressive and proactive planning services. As a self-employed business or individual taxpayer in the U.S., things like health insurance plans and premiums, retirement contributions and savings, and basic tax planning are things that must be reviewed and discussed at least once a year if not once a quarter. That is why we repeat and stress the fact that we are open and available year round to have these types of conversations and meetings.
Understanding the needs of Real Estate Agents & Brokers
As your sales grow, you may find yourself spending more time than you should on your accounting, taxes and/or finances. That energy and time should really be spent on managing day to day operations, customer service, and most importantly SALES & BUSINESS DEVELOPMENT. If you need C.F.O. services, payroll services or help managing your accounts payable, 212 Tax is always happy and ready to help. We can help you streamline your workload so you are not spending your free time researching decisions and managing details that are more effectively and efficiently performed by licensed and trained accountants.
Contact us today to discuss how 212 Tax & Accounting Services can help you establish the business and financial infrastructure from which your real estate business can thrive!!