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Tax Savings for Real Estate Agents

Tax Savings for Real Estate Agents


At Star Bay Realty, We understand the unique challenges and opportunities that come with running a real estate career. One of the most crucial decisions you can make to protect your personal assets and maximize your tax savings is to form a Limited Liability Company (LLC). In this blog post, We’ll share our insights on why an LLC is a valuable tool for real estate agents, particularly those working with Star Bay Realty and have a 100 percent commission plan.

PLLC or LLC or PA? What is the Difference?

  1. PLLC-Professional Limited Liability Company

  2. - If electing to operate as an LLC, you should use the designation of Professional LLC which is PLLC. The P means you must be licensed to operate in that field. Real Estate Agents fall in this category as they must be licensed to operate.

  3.  

  4. PA-Professional Association

-A corporation which requires a license to work in this field.

What Requirements Will I Be Subject To?

PA

PLLC

Annual Meeting/Minutes

No Annual Meetings/Minutes

File Annual Report

File Annual Report

Separate Tax ID Number

Separate Tax ID Number

Separate Bank Account

Separate Bank Account

No Commingling of Funds!

No Commingling of Funds

Choice of Taxation

Choice of Taxation

 

 

 

Benefits of Filing your Taxes electing S Corporation

  1. You can Minimize Your Tax Liability and Protect 75-85% of your Net Income from Payroll Tax when you elect to file as an S Corp. However you are still subject to Income Tax.

 

 

Top 10 Steps to creating your LLC

1. Form an LLC (Must use the Designation PLLC). The name must be you full Legal Name. This can be done on sunbiz.org.

2. Obtain Tax ID (EIN) number for the PLLC.

3. Change your name with Florida Real Estate

Commission (FREC) to the name of the PLLC.

4. Change your name with your brokerage to the

name of the PLLC. Let them know this is how you want to collect commission.

5. Fill out a new W-9 form with your brokerage so your 1099 will reflect your LLC.

6. Open a bank account for the PLLC.

Obtain a credit card in the name of the PLLC, if

Necessary.

7. Ensure bookkeeping system is in place to record all

business income/expenses in order to maximize

deductions.

8. Hire an Accountant! This is crucial in ensuring you are filing your taxes the correct way and saving the most you can.

9. File an election for the PLLC to be taxed as

an S-Corporation.

10. Enjoy saving money!

 

While we’ve provided information on the potential benefits of forming an LLC for real estate agents, We are not a tax professional or accountant. The information provided in this blog post is for general informational purposes only and should not be construed as legal or tax advice. It's strongly recommended to consult with a qualified tax advisor or attorney to determine the best course of action for your specific circumstance. Please visit starbayrealty.com if you would like join our 100 percent Real estate Brokerage in Tampa florida.