As we enter the tax season I look forward to meeting once again with my accountant. We talk more about the upcoming golf season than we do about business. We always promise to invite the other to our club to play in one event or another. It wasn't always this way.
Beginning in the mid '70's I started my own small service business and got quite adept at it. Many of the principles are similar in nearly all service providing industries. You know the drills, under promise and over produce to make them 'customers for life'. Make them cheerleaders for your business, be there when they need you, and on and on. Money comes in and you spend it to show everyone how well you are doing. There is surely more out there to be made. The bliss of ignorance ends on the 15th of April.
Uncle Sam knows what your gross revenues are for the year, and you may subtract legitimate expenses incurred (with documentation) from that gross to come up with a Profit /Loss Statement. From that profit he will cordially request about a third of it, or else. Don't even ask what the 'or else' means. Newer agents who have a pretty good year are often unprepared. They haven't sent in quarterly estimates and, often, didn't even know they were required to do so.
Since most realtors are self employed it is vital, in my opinion, to have a trusted Certified Public Accountant in your tool box. My guy handles much larger clients with far more complicated forms than I will ever need, yet he provides me with the same service I give to all of my clients. Ask around your office for the names of CPA's. I'd look for someone who is also self employed, or with a small firm, who will give you sound advice as you grow your Real Estate business. Al gives me pre-printed forms to send in to both the IRS and the Commonwealth of Mass. and usually the amount I should send.
Your tax person will soon know your tendencies, perhaps give you a graph with how you are trending, and other advice that will help you from one year to the next. I was lucky to get Al in the 1980's and he's been able to keep the wolf away. His only advice now is keep your head down and follow through on the swing. The golf pro used to charge me $30 a half hour for the same advice. Go figure!!!
Comments(3)