Real estate agents have to cultivate expertise in both real estate law and small business operations, since they often do their own bookkeeping as sole proprietors. Navigating the complexities of the tax system can leave even a seasoned agent scratching her head, but understanding how to apply deductions and when to issue 1099s drastically simplifes a real estate agent's paperwork.
Can Real Estate Agents Write Off Their Car Insurance on Their Taxes?
People who use their car for business can write off the business portion of their car insurance using a Form 1040 Schedule C. However, you will have to choose between writing off all actual expenses, such as the cost of repairs, gasoline and licensing, and taking mileage. You cannot do both.
Does a Real Estate Agent Issue a 1099 to a Vendor?
If you hire an individual who performs at least $600 worth of work in a year, you must provide that vendor with a Form 1099-MISC. If, however, the payment goes to a corporation, such as a marketing company, you do not need to provide the vendor with this form, unless the payment was for attorney's fees.
Can a Real Estate Agent's Spouse Get a Food Tax Deduction or Mileage Tax Deduction?
Real estate agents are eligible for the same deductions as any business owner, including deductions for business-related meals and mileage. However, unless your spouse is an actual waged employee, you cannot take these deductions. A non-employee spouse's expenses are personal, even if your spouse was helping you with work-related activities.
Can a Real Estate Agent Give a 1099 to Another Real Estate Agent?
Of course. If a real estate agent performs a legitimate service for another, such as consulting on a property or helping to get the property ready to show, she is are acting in the capacity of a vendor and must be given a Form 1099 -MISC for any paid work exceeding $600.
What Percent of Taxes Do You Pay for Selling Real Estate?
According to the United States Bureau of Labor Statistic's Occupational Outlook Handbook, median pay for a real estate agent or broker in 2010 was $42,680. If this agent were married, after exemptions and deductions, the couple's remaining income would mostly likely fall squarely in the 15 percent tax bracket. If her spouse also has a job, the couple's tax bracket would depend on his income as well. Most real estate agents are self-employed, which means they are also required to pay self-employment tax, which at the time of publication is 13.3 percent of their gross income. In addition, real estate agents must pay any local or state income taxes that apply.
Kristi Waterworth started her writing career in 1995 as a journalist for a local newspaper. From there, her meandering career path led to a 9 1/2 year stint in the real estate industry. Since 2010, she's written on a wide range of personal finance topics. Waterworth received a Bachelor of Arts in American history from Columbia College.