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S-Corps for Real Estate Agents

S-Corp

 

 

Setting up a S-Corp it allows us to limit the amount of self-employment you have to pay each year.

We are able to do this by paying some of your net income through payroll (subjected to SE tax) and the rest in distributions not subjected to SE tax.

This way you wear two hats:
• Owner – K1 not subjected to SE tax
• Worker – subjected to payroll tax (W-2)

 

 

How it works?

 

• Need to Set Up Company With State of Florida

• Need to Change Your RE License – Form # DBPR RE 16

• S-Corp Election

• Separate Bank Account and Records

• Separate Tax Return (1120S) – K1 flows to individual return

• Payroll For All Workers – “Fair and Reasonable Salary”

 

 

Example of how you can save

S-Corp vs.
Individual (1040)
       
 

S-Corp

  

1040
       

Total Income

 $        150,000

  

 $        150,000

Total Expenses

 $          50,000

  

 $          50,000

Net Profit Before Salary

 $        100,000

  

 $        100,000

Salary

 $          50,000

  

  $                   -  
       

Taxes

      

Income

Same

  

Same

Self Employment Tax

 $                   -  

  

$           15,300

FICA Employment Taxes

 $             7,650

  

  $                    -   

Florida Unemployment

 $                216

  

  $                     -  

Federal Unemployment

 $                  42

  

  $                     -  
       

Cost

      

Annual Filing

 $                150

  

  $                      -  

Tax Return Preparation

 $                750

  

$                 300

Payroll Preparation

 $                775

  

  $                      -  
       

Total Taxes and Cost

 $              9,583

  

$            15,600
       

S-Corp Tax Savings

    $              6,017

    
       

 

 

Call for your free

consultation today!