Accounting and Financial
Inman Rating

Run a better real estate business with Formations: Tech Review

This is as well-designed software as I’ve seen in years, able to offer long-sought relief to any independent contractor who suffers from anxiety or stresses over the numeric nuance of business self-governance
More money for you, not taxes

Formations helps real estate agents smartly manage their annual tax commitments and monitor long-term financial performance.

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Formations is a tax and revenue management app.

Platforms: Browser
Ideal for: All agents

Top selling points:

  • Clear, elegant user experience
  • Simple S-Corp creation engine
  • Two-way bank integrations
  • Annual tax preparation and filing
  • Financial oversights

Top concern:

Merely your tolerance for firing your accountant. However, the app is best leveraged when users become an S-corp, so be comfortable with that when deciding to move forward.

What you should know:

Formations is not accounting software. It’s a revenue tracking and tax management application that helps agents create an S-Corp and direct themselves as a business. It facilitates self-payroll, manages all tax withholdings, gauges tax-to-revenue metrics, tracks expenses and handles aspects of simple bookkeeping.

Formations can file tax returns, offer liability predictions and help agents control profit and loss. This is as well-designed software as I’ve seen in years, able to offer long-sought relief to any independent contractor who suffers from anxiety or stresses over the numeric nuance of business self-governance. This is what Turbo-Tax wants to be.

The first year I was working for myself as a copywriter and freelance journalist, I called a CPA friend at 5 a.m. a few weeks before April 15, pleading for help. I was stressed to the point of stillness. My filing was not the slightest bit complex, but my number-phobia and new freelancer-angst had coalesced into palpable gripe around my psyche. What are estimated quarterlies? I hadn’t paid them. I’m a 1099? Wait, that can be deducted?


I panic at the sight of printed data-entry boxes resting on clinical fine print. Medical forms. Tax forms. It doesn’t matter — the physical constraints they demand trigger my crippling claustrophobia and remind me of why I will only write on a screen that is blank from edge to edge. No menus. No font choice. Nothing. (I use Calmly Writer, btw.) In short, I’d rather find a spider in my ear than face the forms and the processes involved with doing taxes. I paid a CPA $500 this year.

If you can relate to any part of my confession, then pay for this software.

Formations is for any sort of independent contractor, and ideal for real estate agents who want to control how they grow. The new agent will find its welcoming, spartan interface a visual relief and the growing, entrepreneurial agent will recognize it as a technological ally.

Formations tracks income and reactively adjusts what you’ll owe the government for every dollar earned, doing so in a tightly designed, hyper-transparent user interface. It offers graphical views into profit and loss, offers payroll summaries, tax payment status and ongoing to-do lists relative to outstanding tax returns. There’s also a mileage tracker and like the app’s other features, it’s designed to remind you to use it.

Bank integrations pull in your spending data for easy categorization within your business. While not every cost is business related, more of them than you realize are, and that is why Formations can be so valuable.

Setting up the S Corp is handled by Formations, and officially transitions the user from contractor to formal business entity. It offers you more protection, and of course, better tax breaks. It also alleviates the painful self-employment tax.

The overall user experience within Formations never wavers from initial account setup. It’s fast, dynamic and ever-lucid, knowing exactly what you need to see each time you log in. It offers consistent recommendations for expenses and ways to save. In fact, customers of Formations save an average of $11,280 in taxes, according to the company.

I was told by its leadership that the app wants to “democratize the loopholes” used by much larger corporate entities. And I believe them. They call it predictive tax management with good reason and plenty of technological sophistication to prove it.

This is the type of tool you could go without, but only until you use it. It’s like having heated seats in your car.

For any agent looking to better formalize themselves as a business, a characteristic any top producer will attest to being the difference maker, Formations is a smart, simple and highly valuable way to change how you manage your finances.

Have a technology product you would like to discuss? Email Craig Rowe

Craig C. Rowe started in commercial real estate at the dawn of the dot-com boom, helping an array of commercial real estate companies fortify their online presence and analyze internal software decisions. He now helps agents with technology decisions and marketing through reviewing software and tech for Inman.

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