REALTORS, Real Estate Agents, Appraisers and Rental Real Estate
Licensed real estate agents are statutory nonemployees and are treated as self-employed for all Federal tax purposes, including income and employment taxes, if:
- Substantially all payments for their services as real estate agents are directly related to sales or other output, rather than to the number of hours worked
- Their services are performed under a written contract providing that they will not be treated as employees for Federal tax purposes
This category includes individuals engaged in appraisal activities for real estate sales if they earn income based on sales or other output.
Rental Real Estate
This can be a lucrative method of wealth building. The main trick is to have your tenant pay the monthly costs and you can take in the appreciation when you sell the property.
Cash is king with rental property. The rental income must cover the mortgage payments, taxes, insurance and repairs. Don’t forget to plan for vacancies or for large maintenance items (roofing, furnace, et cetera). Deductible expenses are mortgage interest, property taxes, insurance, maintenance, depreciation and management fees.
Depending on your income, if you are considered a real estate professional, real estate losses can offset your earned income.
Keep good records, not only for tax reporting but for the success of your business.
Don’t underpay your taxes. Interest and penalties can be assessed if you owe more than $1,000 when you file your Federal or State returns. Estimated due dates are: April 15, June 15, September 15 and January 15 of the following year.
We can provide (depending on your needs):
- Accounting and outsourced financial management
- IRS problem resolution
- QuickBooks Accounting Support & Training
- Reviews & Compilations
- Staff Training
- Tax Services
- Sales & Use Taxes
- Temporary Living Expenses
We have years of experience in working with Real Estate Professionals. Put our expertise to work for you by contacting us today.