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					                      CPA


                      TO


          THE REAL ESTATE INDUSTRY

                      &

                SMALL BUSINESS




-   CONTRACTORS

-   SOLE PROPRIETOR

-   AGENTS

-   SENIOR BUSINESS MAN
Tax Information for Real Estate Agents
             Presented by
        Walker Business Systems
                                  Business Structures

A.   Corporations may be set up in one of three ways:
     A regular C-Corporation
     S-Corporation
     Limited Liability Corporation

     Partnerships may be set up as either a:
     General Partnership
     Limited Partnership
     Limited Liability Corporation

     Sole Proprietorship
                                Type of Taxes

Federal and State Income Taxes
Self-Employment Taxes
Business Taxes
Personal Property Taxes
Sales Tax

                                2009 Tax Rate Schedules

Filing Status – Single

If taxable income

   is over ---   But not over   The tax is:

$0               $8,350         10% of the amount over $0
$8,350           $33,950        $835.00 plus 15% of the amount over $8,350
$33,950          $82,250        $4,675.00 plus 25% of the amount over $33,950
$82,250          $171,550       $16,750.00 plus 28% of the amount over
$171,550         $372,950       $171,55 plus 33% of the amount over $171,550
$372,950         no limit       $108,216 plus 35% of the amount over $372,950
                                 Self-Employment Taxes

                Self-Employment Tax is Social Security Tax and Medicare Tax

For an employee the percentage is applied to Gross Income

               Social Security         Medicare                  Total

Employee          6.2%                 1.45%             7.65%
Employer          6.2%                 1.45%             7.65%
  Totals                                                 15.3%


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.
                       OVERVIEW OF INCOME TAX RETURN

Income (from all sources - example: Wages, Interest, Dividends, Business, Partnerships, Rental,
Director’s fee, gambling, etc…)
Less: Adjustments For Adjusted Gross Income (AGI)
    MSA, Self-employed Health Insurance, Retirement Plans
Adjusted Gross Income
Less Standard Deduction or Itemized Deductions
    (For 2010: Single = $5,700; MFJ = $11,400; HH = $8,400)
Less Personal Exemptions
Taxable Income
Income Tax
Less Credits
    Child Care, Child Tax, Education
Self Employment and Other Taxes or Penalties
Less Amount of Estimated Payments or Withholdings
Net Due or Refund
                          How to Calculate a Profit & Loss

                                        John Doe Realtor
                                       Profit & Loss Statement
                                       31 December 2010


Gross Income

       Income from Sales Commissions                             xxx,x
       Income from Listing Commissions                           xxx,xxx
       Income from Rental Commissions                            xxx,xxx
       Income - Other                                            xx,xxx
       Total Income                                              xxx,xxx

Expenses

       Advertising Expenses                                      xxx,xxx
       Car & Truck Expenses                                      xxx,xxx
       Commissions & Fees                                        xxx,xxx
       Depreciation Expense                                      xxx,xxx
       Insurance Expense                                         xxx,xxx
       Legal & Professional Fees                                 xxx,xxx
       Office Expenses                                           xxx,xxx
       Supplies Expense                                          xxx,xxx
       Taxes & Licenses                                          xxx,xxx
       Travel & Entertainment                                    xxx,xxx
       Business Meals                                            xxx,xxx
       Other Expenses                                            xxx,xxx
       Payroll Expenses                                          xxx,xxx

Total Expenses                                                   xxx,xxx

Net Income (or Loss)                                             xxx,xxx

The actual taxes due depends upon your business structure.
                        Tax Deductions for Real Estate Agents

Accounting & Tax Prep

Advertising
   Newspapers
   General Magazine
   Proprietary Magazines
   Giveaway Items
   Business Cards
   Signs
   Radio
   TV
   Flyers
   Direct Mail
   Billboard
   Telemarketing
   Internet
   Internet Design Work
   Web Site Maintenance Fee
   Home page, access, email fees
   1-800 Number
   IVR Technology
   Advertising - Other
                      Tax Deductions for Real Estate Agents

Automobile – Need to Keep a Log of all Miles
      Total Business Miles (Standard rate 2010 = $0.50)
      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




                        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
Lock Boxes
Business Meals (Enter 100% of expense)
                        Tax Deductions for Real Estate Agents

Office Supplies
    Agent 360
    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)

   Federal Income Taxes
        st
       1 Installment 4/15/10
        nd
       2 Installment 6/15/10
        rd
       3 Installment 9/15/10
        th
       4 Installment 1/15/10
       Payment made with Extension 4/15/11

   Property Taxes
   State Taxes
       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

   Date        Description      Amount


Home Office Deduction

   In order to claim this deduction:

       Business must show a Profit.

       Taxpayers must use that part of their home:

           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

           On a regular basis for certain storage use such as inventory or product samples, as
           rental property, or as a home daycare facility.

				
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