(Resolved) How Do I File Taxes As A Realtor?

Real estate agents are generally paid commissions on the sales of property and receive a 1099 at the end of the year. This means that now you are considered self- employed for tax purposes and you should approach this like any business venture. This means that it is now time to keep track of your income and expenses to track the monetary success (and failures) of your new business 🤓 Having a good system for tracking can help to ensure that you are not missing out on deductions against your income and therefore lower the amount of taxes that you pay on your income 🤓 [1]
You can send your periodic payments as often as you’d like (after every closing, for example). But you must make payments at least quarterly if you expect to pay more than \$1,000 in taxes for the year. Hopefully, you’ll be making so much money in real estate that you’ll be paying much more than that each year! So you should get in the habit of paying quarterly from the beginning of your real estate career. The quarterly due dates typically follow the same schedule every year (but you should still confirm the dates each year just to be sure): (last edited 49 days ago by Janan Christie from Rasht, Iran) [2]
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According to the experts from realestateexpress.com, many real estate professionals might not have a 401(k), however, this doesn’t mean that you can’t save for retirement come tax time. One consideration is to fund an IRA. If you’re at the start of your career and still in a lower tax bracket, you might want to consider funding a Roth IRA. Roth IRAs don’t provide a tax break for contributions, but when you pull the money out of the Roth IRA it’s usually tax-free. If you’re in a lower tax bracket right now and don’t need the tax break you might want to consider this as an option to save for retirement. [3]
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As stated by the researchers from vaultpalmbeach.com, we advise you to open up a separate bank account and credit card for your business expenses (This is mandatory for a P.A.). It is a good idea not to intermingle personal and business funds. Additionally, keeping good records is important. You should keep a mileage log, receipts (for meals/entertainment write the purpose and clients name on the back), and keep your books up to date. Additionally, for anything that you may also use for personal reasons, such as a cell phone or laptop, you need to track business time versus personal time. For that reason, you may wish to have a separate computer and phone for business purposes. (edited by Danielle Thompson from Anqiu, China on April 13, 2020) [4]

Article References

  1. https://harriscpas.com/tax-tips-every-realtor-needs-to-know-in-their-first-year/
  2. https://www.aceableagent.com/career-center/national/the-definitive-guide-to-paying-taxes-as-a-real-estate-agent/
  3. https://www.realestateexpress.com/career-hub/blog/tax-tips-for-real-estate-agents/
  4. https://www.vaultpalmbeach.com/p/real-estate-agents-income-tax
Mehreen Alberts

Written by Mehreen Alberts

I'm a creative writer who has found the love of writing once more. I've been writing since I was five years old and it's what I want to do for the rest of my life. From topics that are close to my heart to everything else imaginable!

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