How many Real Estate Agents are filing as S-Corp?

Question

My wife and I are a team of agents, and with the new year beginning, I'm looking into creating an S-Corp for our finances. I'm aware of the pass-through structure and how it might work, but I'm curious: How many of you other BP realtors are using this tax structure, and at what level of income would you consider it to be advantageous? We are in NY, and will probably make 80-100k in commissions this year if that helps

I'd like to make one of our cars the dedicated "work" car, and be able to itemize more deductions. Anyone else have thoughts on leveraging this tax status?

Todd Lennig · Answer

my accountant recommends 100k but if when I explained why i was doing it at a much lower point she said ok. Payroll tax can be an interesting beast. There obviously are a lot of payroll companies out there. The one that I like the most and recommend is Gusto. I find that they are very small business friendly, that their intro package much cheaper than any thing else i have seen. Gusto also lets you run as many pay rolls as you want a month for a set price not price per payroll.

My understanding is that s-corps need to run a regular payroll. Gusto recommends every 2 wks.

Robert Dopp · Answer

Switched to an S Corp a few years back and it was the best decision; it's great for agents. I know some people argue against it. Set up an LLC and payroll(weekly, quarterly, monthly, yearly - whatever you want) - DO IT and don't look back. The benefits are bananas.

Brandon Vukelich · Answer

I was somewhere around $100k/year when my CPA told me to elect my LLC as an s-corp. Saved somewhere in the neighborhood of $10k the first year in taxes. You will need to take a "reasonable" salary. My wife is a stay-at-home-mom but she is a member of my real estate LLC so it pays her $50k/year. We pay quarterly payroll taxes to ensure we don't have a giant payment due come tax time. Regarding the car, I just deduct miles. Again, advice from my CPA based on the 18k-21k I drive each year. Good luck!

Irene Nash · Answer

We switched to being treated as an S-Corp for tax purposes around 5 years ago (later than we should have) and it was a really good choice, self-employment tax was trouncing us before that. Our current accountant says she thinks the bridge point income-wise is around $50K, which sounds low but I trust her more than our previous accountant who gave us a MUCH higher number as the threshold, we should have made the switch long before we did and waiting cost us tens of thousands of dollars. If you figure out how to do payroll for yourself you'll save accounting fees, I've never done it but I don't think it's hard. And I believe it only needs to be done once a year, you just need to pay estimated taxes in quarterly. (I *think*, please verify, accounting is not my strong point.)

How many Real Estate Agents are filing as S-Corp?

How many Real Estate Agents are filing as S-Corp?

Most Popular Reply

5 Replies