The inauguration of President Trump is still fresh in people’s minds, but his administration is already taking swift action to implement campaign promises. In regards to the business world, many entrepreneurs -- like real estate agents -- are unsure how his proposed tax plan will affect their business. Should you expect to make more or less money under the Trump tax plan? Should you prepare your business for a drastic transformation of the tax code? What most agents should remember about taxes For most real estate agents, your tax rate is equal to your personal rate, because your business’s income is taxed at your personal rates (unless you incorporated your real estate business as a C Corporation). Sole proprietors, LLCs, partnerships and S Corporations are “pass through” entities, meaning that any income is passed through untaxed to business owners, who must then pay personal income tax on the dollar amounts passed through to them. President Trump has already ou...
- Structurally speaking, the tax system will get trimmed significantly. Trump’s first major change is to reduce the current 7 tax brackets to 3 brackets.
- The biggest change to the proposed tax system? Simplification, not necessarily fewer taxes.
- For a single real estate agent with $100,000 in net business income, you would pay $1,764 less in federal income taxes under Trump’s proposed plan, or a "true profit" increase of 2.15 percent.