Most licensees work as an independent contractor under a broker.

Some work under an owner developer. In each, case we are running our own business and as such are subjected to the guidelines regarding independent contractors under the IRS. Independent contractors must work for multiple employers. We can’t, but we fall into an exception under the law. There are three things that we must do to qualify under the exception.

First, we must have a real estate license, second, our compensation must be based on production, and third, we must have an independent contractor agreement with our employing broker or owner. Oh, and by the way, the broker cannot pay for any of your expenses! Since this is our own business, here are some things that will help you. Think about incorporating yourself. In Florida, you must incorporate as your name in order for your broker to pay you. For instance, “John Doe, PA”. PA is an “S” corporation, but there are other forms that you may use. This will protect you from some liability and help a little on taxes. Next get a checking account and credit card under that name. Now, all your income and all your real estate expense go in and come out of this account. This will make your end of year accounting for taxes very easy! Speaking of taxes, don’t forget that you will have to pay your taxes quarterly as an independent contractor. Contact your attorney and tax person to help you set it up and all will run smoothly.

If you would like more information contact me. I’m Ric Giumenta. You can have a good day or a bad day. It’s your choice. Make good choices. See you next time!