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Richmond Real Estate Agent

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Title: Richmond Real Estate Agent


1
Richmond Real Estate Agents
  • Elena Skripnichenkos

102-7080 River Rd.Richmond, BC
1 (778) 846-6788
www.richmondrealestateagent.ca
2
Steve Eubanks, RA (Richmond Agent)
  • A tax professional since 1986.
  • BBA and MBA in Finance.
  • Licensed by the U.S. Department of the Treasury
    to represent taxpayers before all administrative
    levels of the Internal Revenue Service (IRS),
    including examination, collection and appeals
    functions as Enrolled Agent.
  • Enrolled Agents adhere to a code of ethics and
    professional conduct and are required by IRS to
    take Continuing Professional Education.
  • Provide tax preparation, representation, tax
    planning and other financial services to
    individual and business taxpayers.

3
Introduction
  • Licensed Real Estate Agents
  • IRS ruling Statutory NonEmployee Independent
    Contractor. Treated as Self-employed.
  • Substantially all payments for their services
    relates directly to sales or output rather than
    hours worked.
  • Their services are performed under a written
    contract providing that they will not be treated
    as employees for Federal Tax purposes.
  • Form 1040, Schedule C reporting for Real Estate
    Agents as Sole Proprietorships

4
Schedule C
5
Schedule C Income
  • Income
  • Report on Schedule C, Line 1
  • 1099-MISC, Box 7, Nonemployee Compensation (600
    or more)
  • Commissions
  • Referral Fees

6
Schedule C Income
7
Schedule C Expenses
  • Expenses
  • Ordinary and Necessary
  • Auto (actual expenses or standard mileage rate)
  • Meals and Entertainment (50 limitation)
  • Depreciable Assets (Form 4562)
  • Home Office (net income limitation) (Form 8829)

8
Schedule C Common Expenses
  • Advertising Costs Signs, newspaper advertising,
    flyers, online advertising, post cards,
    promotional materials, and anything else that was
    used to market your business may be deductible.
  • Professional Fees Your MLS Board Dues, Realtor
    Dues, Renewal fees with your state board, Errors
    Ommissions Insurance, and any other
    professional fees you incur may also be
    deductible.
  • Education Materials Any continuing education
    classes or seminars, books, magazines, etc.
  • Car/Driving Expenses This is an obvious one most
    agents remember - but many often get confused
    about how much mileage they can deduct or how to
    separate personal and business use. Another
    confusing thing for many agents is deducting
    depreciation if you own your car or lease
    payments if you lease. You can choose to deduct
    per mile driven or you can also do the actual
    cost of insurance, gas prices, repairs
    maintenance, and other vehicle expenses.
  • Office Equipment Office equipment can include
    desk fees if you have them at your office,
    computer/software, phone fees (including cell
    phone), cameras, office supplies, and anything
    else related to necessities of running your
    office.
  • Business Entertainment You can deduct fees for
    dinners, event tickets that are business
    oriented, entertaining for business at home, and
    anything else related to costs you incurred for
    entertaining business clients. Be careful with
    this one - be sure it was really for business
    before claiming it.

9
Business Use of Home (Form 8829)
  • To deduct expenses for business use of the home,
    part of your home must be used regularly and
    exclusively as one of the following
  • The principal place of business for your trade or
    business
  • The place where you meet and deal with your
    patients, clients, or customers in the normal
    course of your trade or business or
  • In connection with your trade or business, if you
    use a separate structure that is not attached to
    your home.
  • Where the exclusive use requirement applies, you
    cannot deduct business expenses for any part of
    your home that you use for both personal and
    business purposes. For example, if you are an
    real estate agent and use the den of your home to
    make appointments and also for personal purposes,
    you may not deduct any businessuseofyourhome
    expenses. Further, under the principal-place-of-bu
    siness test, you must determine that your home is
    the principal place of your trade or business
    after considering where your most important
    activities are performed and most of your time is
    spent, in order to deduct expenses for the
    business use of your home.
  • Deductible expenses for business use of your home
    include the business portion of real estate
    taxes, deductible mortgage interest, rent,
    casualty losses, utilities, insurance,
    depreciation, maintenance and repairs. You may
    not deduct expenses for lawn care in general or
    for painting a room not used for business.

10
Schedule SE
  • Self-employment tax (SE tax) is a social security
    and Medicare tax primarily for individuals who
    work for themselves. It is similar to the social
    security and Medicare taxes withheld from the pay
    of most wage earners.
  • You figure SE tax yourself using Schedule SE
    (Form 1040). Social security and Medicare taxes
    of most wage earners are figured by their
    employers. Also you can deduct half of your SE
    tax in figuring your adjusted gross income. Wage
    earners cannot deduct social security and
    Medicare taxes.
  • SE tax rate. The self-employment tax rate is
    15.3. The rate consists of two parts 12.4 for
    social security (old-age, survivors, and
    disability insurance) and 2.9 for Medicare
    (hospital insurance).
  • Maximum earnings subject to SE tax. Only the
    first 102,000 of your combined wages, tips, and
    net earnings in 2008 is subject to any
    combination of the 12.4 social security part of
    SE tax, social security tax, or railroad
    retirement (tier 1) tax.
  • All your combined wages, tips, and net earnings
    in 2008 are subject to any combination of the
    2.9 Medicare part of SE tax, social security
    tax, or railroad retirement (tier 1) tax.

11
Adjustments to Income
  • Retirement Contributions
  • A traditional IRA lets you contribute only 5,000
    annually in pretax income toward retirement
  • while a Keogh or SEP-IRA lets you contribute the
    lesser of 25 percent of earned income or 46,000.
  • A SIMPLE IRA lets you reduce your pretax income
    by 10,500 a year, plus your company can
    contribute a match of up to 3 percent of your
    compensation.
  • Health Insurance
  • 100 of cost
  • Not eligible for any group insurance
  • Net income limitation
  • Adjustment for one-half self-employment tax
    calculated.

12
Estimated Tax Payments
  • You must pay estimated tax (Form 1040-ES) for
    2009 if both of the following apply.
  • You expect to owe at least 1,000 in tax for 2009
    after subtracting your withholding and credits.
  • You expect your withholding and credits to be
    less than the smaller of
  • 90 of the tax to be shown on your 2009 tax
    return, or
  • 100 of the tax shown on your 2008 tax return.
  • Due dates for Form 1040-ES
  • April 15
  • June 15
  • September 15
  • January 15

13
Business Common Tax Forms
  • Form 1040 Individual Income Tax Return
  • Schedule C Profit or Loss from Business
  • Form 4562 Depreciation and Amortization
  • Schedule 8829 Business Use of Home
  • Schedule 2210 Underpayment of Estimated Tax
  • Form 4868 Automatic Extension for Time to File
  • Form 1040-ES Estimated Quarterly Tax Payments
  • Publication 334 Tax Guide for Small Businesses

14
Questions?
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