As a real estate agent, you have a lot to juggle: crushing your commissions, generating leads and building your brand, and these are just a few of your primary concerns. As a result, accounting may not be at the forefront of your mind. However, failing to take your accounting seriously can lead to some big issues down the road. It’s worth taking the time to fully understand your particular tax situation and to optimize your accounting process. Ready to get your finances in order? The following are three common mistakes that agents tend to make: 1. Choosing the wrong reporting method (hint: pay less taxes with “cash basis”) If you’re trying to minimize your real estate agent tax payments (as most agents are!), you’ll want to consider reporting on a cash basis, which means that you only pay taxes on the income you receive during the year. On the other hand, with the accrual method, you pay taxes on income you have earned, but not necessarily received such a...
- Keeping tabs on your accounting is equally important as lead gen, marketing and all the other tasks that eat up your hours as a real estate professional.
- Agents can save time and money by filing on a cash basis, separating personal and business expenses and setting aside commission money ahead of time.
Learn the New Luxury Playbook at Luxury Connect | October 18-19 at the Beverly Hills Hotel