As a realtor you are likely familiar with “ABC”, Always Be Closing, and if you work hard enough and are lucky enough, you are able to close often. Being a realtor has lots of perks and one of them is to be self-employed, if you follow these 4 simple rules, you can assure to keep the IRS at bay and give you peace of mind:
Rule #1 – Keep track of your expenses!
There are so many expenses that many people fail to deduct (auto, advertising, professional fees, meals) and they are missing out! Not deducting allowable expenses subjects you to pay more taxes! Staying organized and keeping track is crucial if you want to keep that tax bill on the low end. The rule is simple; if it is incurred in the operation of your business, it’s deductible!
There are plenty of programs and Apps out in the market that can help with that, in fact, they almost do it all for you. Use them!
Rule #2 – Pay your Estimated Taxes!
Estimated tax payments are used to pay tax on income not subject to withholding, like a nice chunky commission check for example. On a quarterly basis you MUST sit down with that handy dandy program or App (from above) that you use to keep track of things; asses your income for the quarter and deduct your expenses this will give a total gross income. We recommend that you send in 20%-30% of that amount to keep you penalty proof from the IRS.
Rule #3 – Pay the Taxes ON time!
Estimated tax payments are made on a quarterly basis and are due on (usually) on April 15, June 15, September 15 and January 15 (of the following year). If these payments are not made on time you will be subject to penalties for late payment. Do yourself a favor, don’t pay more than you have to. If you are going to make the payment send it on time and avoid yourself more taxes than necessary.
Rule #4 – Hire a professional!
If you’re a realtor you are most likely a "people person" and may or may not be a number’s person but that’s OK, there are plenty of professionals out there who can help you stay on track. Our office in Miami, FL will not only help you stay on track but get you out of trouble if missed any of these rules and now find yourself owing tax penalties & interests. Don’t be ashamed, you are not alone and we can help! Call us and find out what your options are and how to get back on track.