Tax attorney Mark Kohler warns real-estate agents earning $50-$100k that operating without a business entity can cost up to 40% in combined taxes. An S-corporation or professional corporation formed early can save $6-$7k annually in FICA taxes, even retroactively if you started as an LLC.
Let's say you're just a regular realtor and you haven't set up your entity yet. You're not broker level, you haven't been out there for a long time, but you've had a couple successful years and now you're making 50 to 100 grand a year. I promise you, at this event I'm doing today, there'll be a realtor in the room that made 100 grand last year. No LLC, no Corp. And they are paying up to 40% in taxes between FICA, state and fed. And they, they will many times be in tears. It's very, I'm not kidding. It's very, very hard for them to know this. There's nothing I can do. I cannot go back in time. And maybe it snuck up on them. They should have freaking been an S corp, but they missed it. And they're not even an llc. So coming out of the gate, I'm going straight to a corp. I might do what's called a PC, a professional corporation. So I'd name it John Doe or Mary Jane comma PC. And I just come out of the gate as an S corp. If they were an LLC last year, I could go back in time, do my S election, kick out some money for fica. I could probably save them six or seven grand. That's huge.
The secret to managing your family's future #financialfreedom #estateplanning #shorts
Moving Property to an LLC: What They Don't Tell You #realestate #investing #tips
