Tax Information for Real Estate Agents Presented by Walker Business Systems

Type of Taxes 1.Federal Taxes 2.Self-Employment Taxes 3.Business Taxes 4.Personal Property Taxes 5.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 Social SecurityMedicareTotal Employee 6.2% 1.45%7.65% Employer 6.2%1.45%7.65% Totals15.3% 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 Commissionsxxx,xxx Income from Listing Commissionsxxx,xxx Income from Rental Commissionsxxx,xxx Income - Otherxxx,xxx Total Incomexxx,xxx Expenses Advertising Expensesxxx,xxx Car & Truck Expensesxxx,xxx Commissions & Feesxxx,xxx Depreciation Expensexxx,xxx Insurance Expensexxx,xxx Legal & Professional Feesxxx,xxx Office Expensesxxx,xxx Supplies Expensexxx,xxx Taxes & Licensesxxx,xxx Travel & Entertainmentxxx,xxx Business Mealsxxx,xxx Other Expensesxxx,xxx Payroll Expensesxxx,xxx Total Expensesxxx,xxx Net Income (or Loss)xxx,xxx The actual taxes due depends upon your business structure.

THREE ITEMS MANDATORY TO PROPERLY BEGIN KEEPING RECORDS FOR YOUR BUSINESS

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 -Accounting & Tax Prep -Advertising -Newspapers- Giveaway Items -General Magazine- Business Cards -Proprietary Magazines- Signs -Radio- Flyers -TV- Direct Mail -Billboard- Telemarketing -Internet Number -Internet Design Work- IVR Technology -Web Site Maintenance Fee- Advertising - Other -Home page, access, fees

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 –Books –Newsletters –Tapes / CDs –Seminars –Magazine Subscriptions Depreciation / Amortization Dues –MLS –NAR –Board of Realtors –Other

Tax Deductions for Real Estate Agents Equipment Rental –Copier –Fax –Computer –Cell Phone –Interest/Finance Charges Insurance –E&O –Insurance – Health –Property –Equipment Legal Sentrilock Business Meals (Enter 100% of expense)

Tax Deductions for Real Estate Agents Office Supplies –Paper –Ink & Cartridges –Other –Photography –Postage/Freight/Delivery –Printing (Non-advertising) –Professional Fees Rent – Office Repairs & Maintenance –Office –Janitorial & Cleaning –Computers –Copier

Tax Deductions for Real Estate Agents Payroll Expenses –Staff (Gross Pay) –Runner Telephones –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 –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 –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 –DateDescriptionAmount Home Office Deduction –In order to claim this deduction: 1.Business must show a Profit. 2.Taxpayers must use that part of their home: 1.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 2.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 1 st Installment 4/15/13 2 nd Installment 6/15/13 3 rd Installment 9/15/13 4 th Installment 1/15/14 Payment made with Extension 4/15/14