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Taxation for Real Estate Professionals

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Steven E Miller, CPA PC

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Business & Tax Considerations for Real Estate Professionals

This brief discussion applies to those in the real estate industry that are working as independent contractors also known as self-employed or sole proprietors. In general, you work for yourself. There are no company benefits or guaranteed salary. If you don’t sell, you don’t eat. You may represent a company or be entirely on your own. The tax results tend to be the same.

Why should you care about taxes? Taxes are typically your largest expense; at least if you are making money. Any smart business person is on the lookout for lowering their business costs to increase their bottom line. At the same time, our income tax system is the most complex on the planet and the IRS is the biggest collection agency around. Most people don’t want to run afoul of them. 

Consider for a minute this simple example: An unmarried sole proprietor earning $200,000 could easily owe $63,300 in income and self-employment taxes. Employing an S Corporation structure with a Solo401k retirement plan could lower that bill almost by one-half.. And there are many more techniques to lower your tax liability, maximize your benefits and keep more of your money in your pocket.

What are my choices? There are many ways to manage your business and taxes. Each person has different goals and needs. A thirty-five year old with 3 young children is a different plan than a 55 year old looking towards retirement or a 45 year old with 2 kids ready to go to college. The opportunities for tax savings, retirement savings, investment and other opportunities are many. You tell us what your goals are.

How do we get started? An initial consultation addresses where you are and where you want to go. Does it make sense to create some business entity like an LLC or a corporation? The radio is filled with advertisements urging you to “Incorporate NOW!” We provide the guidance and list all the various alternatives available to you. YOU make the decision on what works best for you.

At the same time, it is not all about taxes right at this moment. Your decisions will affect your bottom line and we show you the long-term effects to help you make the right decision. We’ll refer you to attorneys that can quickly and efficiently set up a new entity – if that is what you need. We obtain the federal tax identification numbers, guide you on retirement plans, medical insurance decisions, employment of spouses or family members and many other issues.

One of our tasks is to make the process as easy and pain-free as possible. You make the decisions and we work the process. Let us know if we can help. 

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15150 Preston Rd. Suite 210 , Dallas, TX 75248
Call Us: (214) 361-1131 • Fax: (214) 253-2138