What changed everything: the Tax Cuts and Jobs Act, which altered the U.S. tax code more than it had been in several decades. The National Association of Realtors® reports that the new law will bring generally lower tax rates for all individual tax filers. Get used to the new law, because it doesn’t expire until 2025. The bottom line is that buyers may have to make due with fewer allowable deductions and larger amounts of debt. When it comes to mortgage interest, you can deduct interest on qualified residence loans with …

First, this may make you feel a little better: audits by the IRS are actually rare. However, in the event that you are audited, there is virtually nothing you can do to stop it. With that in mind, though, CBS News reports that only three percent of Americans who earned at least $1 million last year were audited by the IRS. The main reason for fewer audits: funding cuts. CBS News reports that the agency has reduced its staffing from 100,000 employees in 2010 to just over 79,000. As of …

When you live solely on commissions, cash flow and timing are vital. Most real estate agents learn the hard way that commission payments don’t always sync up with billing cycles — including quarterly tax payment requirements. Not only could this be harmful economically, but it can also be psychologically damaging — a career demotivator. Don’t give up hope. eCommission can help with advances on that all-important commission payment, before the final closing on the property. The advanced commission payment can help keep cash flow consistent and bridge the time gap …

The Tax Cuts and Jobs Act is a benefit to the real estate industry in two significant ways, as discussed at the Commercial Legislation & Regulatory Advisory Board meeting at the REALTORS® Conference & Expo in late 2018. The creation of Opportunity Zones. These areas have been officially designated by the IRS as lacking investment. Individuals, corporations, businesses, REITs, estates, and trusts can benefit from large tax incentives for investing in Opportunity Zone funds that support real estate development in these areas. For instance, Opportunity Zone investors can legally avoid …

As you probably know all too well, you normally make estimated tax payments four times a year. The remaining dates that apply for this year are September 15, 2018 (for the months of July, August and September 2018) and January 15, 2019 (for October, November and December 2018). The IRS requires you to make quarterly estimated tax payments for 2018 if you owe at least $1,000 in federal tax (after subtracting federal tax withholding and refundable credits). You also owe if you expect federal withholding and refundable credits to be …

The National Association of Realtors®(NAR) worked hard to make sure the new tax bill would include some advantages for real estate agents. As a result, many agents and brokers will see a significant deduction on their business income. The new tax law brings lower tax rates for just about all individual filers. This current tax reform is the largest change to the system in 30 years. It was passed in December 2017 and took effect as of January 2018. As a result of the bill, NAR is projecting a slower …

Although the digital age is changing so many dynamics in the real estate business, the tax process is mostly business as usual. Most agents are still considered independent contractors or self-employed sole proprietors. In most of all cases, that means that no taxes are withheld from your commission checks; therefore, you’re responsible for paying taxes four times a year (quarterly). These are called “estimated taxes,” an educated guess as to how much you will be earning and the resulting percentage you will pay in taxes. These estimated taxes are used …

It’s far from clear that any major reforms to the tax system are coming anytime soon. There is plenty of disagreement in Congress over who should receive tax cuts (individuals, businesses etc.) and how those cuts can be achieved without substantially increasing the federal budget deficit. Tax policy plays an important role in the real estate industry. That’s why the National REALTORS® Association and other groups involved in the housing business are paying close attention to various proposals under consideration. Here are a number of ways that potential changes could …

You need thick skin and a tough mind to make it as a real estate agent. The first few years can be a mighty test of your will. You have to constantly hustle to build a network and a reputation that is large enough to provide you a steady stream of clients. Dry spells are unavoidable, particularly as sales slow down in the winter months. During that time, however, you want to keep the momentum going by continuing to invest in your business. Here are a number of ways that …

tax filing

Many people envy the lifestyle of the self-employed. You set your own hours, you don’t have a traditional boss to whom you are accountable, and in theory, you have unlimited earning potential. The main downside to all of this freedom is your increased tax burden – both paying them and preparing your returns. Many self-employed real estate professionals must make quarterly tax payments or risk IRS penalties and fees. You’re also required to pay the portion of Medicare and Social Security typically covered by an employer. Because of this greater …