Tax Information for Real
Estate Agents
Presented by
Walker Business Systems
Type of Taxes
1.
2.
3.
4.
5.
Federal Taxes
Self-Employment Taxes
Business Taxes
Personal Property Taxes
Sales Tax
Self-Employment Taxes
Self-Employment Tax is Social Security Tax and Medicare Tax
For an employee the percentage is applied to Gross Income
Employee
Employer
Totals
Social Security
Medicare
Total
6.2%
6.2%
1.45%
1.45%
7.65%
7.65%
15.3%
For a Self-Employed Person the percentage is applied to Net Income
Example:
Gross Commission Income
$70,000
Business Expenses
$15,000
Net Income
$55,000
$55,000 times 15.3% = $8,415
Business Taxes – A way local governments collect more tax
revenue. Businesses are charged a percentage of their gross
receipts. (Real Estate agents do not normally have to have a
separate business license from the company where their license
hangs.)
Personal Property Taxes - Examples of personal
property are: vehicles, computers, office equipment, office supplies,
leased equipment or vehicles. The county governments tax the
businesses based on the estimated value of the assets.
Sales Tax – Sales taxes are charged on goods and some
services, purchased by your business. These taxes paid for
business expenses are deductible from your gross business income.
How to Calculate a Profit & Loss
John Doe Realtor
•
Profit & Loss Statement
•
31 December 2013
•
•
•
•
•
•
Gross Income
Income from Sales Commissions
Income from Listing Commissions
Income from Rental Commissions
Income - Other
Total Income
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
Expenses
Advertising Expenses
Car & Truck Expenses
Commissions & Fees
Depreciation Expense
Insurance Expense
Legal & Professional Fees
Office Expenses
Supplies Expense
Taxes & Licenses
Travel & Entertainment
Business Meals
Other Expenses
Payroll Expenses
Total Expenses
xxx,xxx
xxx,xxx
xxx,xxx
xxx,xxx
xxx,xxx
xxx,xxx
xxx,xxx
xxx,xxx
xxx,xxx
xxx,xxx
xxx,xxx
xxx,xxx
xxx,xxx
xxx,xxx
•
Net Income (or Loss)
xxx,xxx
•
The actual taxes due depends upon your business structure.
xxx,xxx
xxx,xxx
xxx,xxx
xxx,xxx
xxx,xxx
THREE ITEMS MANDATORY TO
PROPERLY BEGIN KEEPING RECORDS
FOR YOUR BUSINESS
1. A SEPARATE CHECKING
ACCOUNT FOR ALL BUSINESS
TRANSACTIONS
1. A SEPARATE CHECKING
ACCOUNT FOR ALL BUSINESS
TRANSACTIONS
2. A CALENDAR
1. A SEPARATE CHECKING
ACCOUNT FOR ALL BUSINESS
TRANSACTIONS
2. A CALENDAR
3. A FILING SYSTEM
Tax Deductions for Real Estate Agents
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Accounting & Tax Prep
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Advertising
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Newspapers
General Magazine
Proprietary Magazines
Radio
TV
Billboard
Internet
Internet Design Work
Web Site Maintenance Fee
Home page, access, email fees
-
Giveaway Items
Business Cards
Signs
Flyers
Direct Mail
Telemarketing
1-800 Number
IVR Technology
Advertising - Other
Tax Deductions for Real Estate Agents
• Automobile – Need to Keep a Log of all Miles
•
_____ Total Business Miles (Standard rate 2013 = $0.565 per mile)
•
_____ Total Miles in Vehicle
•
_____ Percentage Business Miles
• Actual Automobile Expenses
– Includes
•
•
•
•
•
Fuel
Repairs – Oil Changes, tires, other repairs
Insurance
Vehicle registration, license
Vehicle lease or rental fees
Tax Deductions for Real Estate Agents
-Bank Charges
- Checks
- Service Charges
-Charitable Contributions (Deductible on Personal Return)
-Computer MLS Charges
-Contract Labor
- Technology Support
- Coach
-Copies
-Credit Reports
-Customer Gifts
- Gift Albums
- Certificates/Other
Tax Deductions for Real Estate Agents
•
Continuing Education
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Books
Newsletters
Tapes / CDs
Seminars
Magazine Subscriptions
•
Depreciation / Amortization
•
Dues
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–
–
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MLS
NAR
Board of Realtors
Other
Tax Deductions for Real Estate Agents
• Equipment Rental
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Copier
Fax
Computer
Cell Phone
Interest/Finance Charges
• Insurance
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–
–
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E&O
Insurance – Health
Property
Equipment
• Legal
• Sentrilock
• Business Meals (Enter 100% of expense)
Tax Deductions for Real Estate Agents
• Office Supplies
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–
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–
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Paper
Ink & Cartridges
Other
Photography
Postage/Freight/Delivery
Printing (Non-advertising)
Professional Fees
• Rent – Office
• Repairs & Maintenance
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–
–
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Office
Janitorial & Cleaning
Computers
Copier
Tax Deductions for Real Estate Agents
• Payroll Expenses
– Staff (Gross Pay)
– Runner
• Telephones
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–
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CommuniKate System
Phone Line
Long Distance
Cellular Phone
Answering Service
Computer/Internet Line
• Utilities – Office
• Miscellaneous
• Concessions – Selling Expenses
Tax Deductions for Real Estate Agents
• Taxes
–
–
–
–
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Payroll (FICA)
Payroll (FUTA)
Payroll (SUTA)
Property Taxes
State Taxes (If Incorporated)
• Annual Report
• Franchise & Excise
Tax Deductions for Real Estate Agents
• Travel & Entertainment & Lodging
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Airfare
Bus & Subway
Bridge & Highway Tolls
Car Rental
Computer Time Charges
Laundry
Lodging (do not combine with meals)
Meals (do not combine with lodging)
Parking
Porter, Bell Captain
Taxi
Telephone & Fax Charges
Train
Other
Tax Deductions for Real Estate Agents
•
Equipment Purchases
–
•
Date
Description
Amount
Home Office Deduction
–
In order to claim this deduction:
1.
2.
Business must show a Profit.
Taxpayers must use that part of their home:
1.
2.
Exclusively and regularly as their principal place of business, as a place to meet
or deal with patients, clients or customers in the normal course of their
business, or in connection with their trade or business where there is a separate
structure not attached to the home; or
On a regular basis for certain storage use such as inventory or product samples,
as rental property, or as a home daycare facility.
Federal Income Taxes
1st Installment 4/15/13
2nd Installment 6/15/13
3rd Installment 9/15/13
4th Installment 1/15/14
Payment made with Extension
4/15/14