National Agents:
As an independent contractor, no IRS or state income taxes are taken out of your commission check. The IRS suggests paying estimated taxes during the year to avoid penalties. Click for details on IRS estimated tax info. The IRS payment dates are Apr. 15, June 15, Sept. 15 and Jan. 15 of the following year. It is similar for Virginia. See Virginia details here. This will help avoid penalties when filing your tax return.
Full details on estimated taxes with IRS link.
You will be able to deduct certain expenses related to your real estate business. So here are some of the most common real estate agent deductions.
- Marketing: sales and open house signs and flyers; website development and maintenance; marketing programs and mailers.
Real estate continuing education costs
Real estate licensing and renewal fees
Real estate association dues, multiple listing service (MLS) dues and Errors and Omissions insurance fee.
Transportation: Proportional automobile maintenance and repairs, gas, mileage, auto insurance, parking and new car purchase or lease costs.
Travel airfare, lodging, and meals for real estate education and business purposes
Home office expenses, whether you rent or own your home
Gifts ($25 deduction limit), entertainment, and other costs you incur to please clients and keep them coming back to you for their real estate needs
No Income? Even if your real estate business had no income during the tax year, you may still be able to claim deductions from any income that you may have from another job or business. Details on legalzoom.com
Disclaimer: This is not tax advice. You are advised to confirm with a tax advisor.
This has been another important “Training in a Minute”.
Keith