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AS OF JANUARY 2024, REALTORS CAN SET UP AN LLC AND BE PAID AS AN LLC/SCORP...

Why is this important?  Because once you have an LLC, you can create (hire an accountant to create) an Scorp for tax purposes and eliminate 15.3% self employment taxes.   (If an agent is making more than about $40,000 per year, this could be a good option for you.). CLICK HERE FOR AN UPDATE FROM TREC AS OF 11/3/23

THIS PAGE IS NOT A SUBSTITUTE FOR LEGAL AND ACCOUNTANT ADVICE - PLEASE SEEK PROFESSIONAL GUIDANCE IF YOU HAVE ANY QUESTIONS.  

CLICK HERE FOR MORE INFORMATION ABOUT THE CHANGE PER TREC.  I have reached out to them for additional clarification but the guidelines are not in place as of 10/23/23. 

As of now, HERE IS A LIST OF STEPS TO TAKE TO GET PREPARED TO BE PAID AS AN LLC IN 2024.  I say as of now, because we do not know what additional steps TREC will require once the final guidelines are released.  

  1. Determine if this is the right step for YOU.  Discuss this option with an attorney and/or your accountant to determine if this is the best option for YOU.  
  2. Determine what your LLC name would be and search the SOS website to make sure the one you choose is available, CLICK HERE.  You do have to register with the SOS to be able to search and set up your LLC.  THIS will be the document that you register once you are in the SOS website.  Please make sure you save those passwords and log in information for the future, you have to log in for each renewal to show them your SOS account is in good standing.  THERE IS A $300 FEE FOR THIS.  
  3. HERE IS A GREAT VIDEO TO EDUCATE YOU ON LLC'S:  CLICK HERE
  4. If you set up an LLC, it is likely that you should also have your accountant set up an SCORP for tax purposes.  CLICK HERE for more information about Scorps.  
  5. You will need to apply for an EIN number with the IRS, this is likely a better solution than using your social security number.  CLICK HERE FOR MORE INFO. Once you have this, you will need to prepare a brokerage entity W-9. CLICK HERE
  6. Once you have your LLC and your EIN, you can go set up a business bank account and credit card.  I suggest that ALL Business expenses are on those accounts.  Your commission wires will be set up to wire to the business bank account.  
  7. How are you managing your accounting?  Are you using something like Quickbooks and are you balancing things or is your accountant?  Once your LLC is formed, use the business account for all purchases and banking.  
  8. IN JANUARY - you will fill out the business entity for via TREC and pay a $140 fee.  You will have to renew this entity every two years just like your real estate license.  I believe the renewal fee is $70.  
  9. As of now, at The Home Sweet Home Group, we will be registering business entities at the beginning of a year and not mid-year so please plan ahead NOW.  

***There may be additional fees to this formation and set up, it is impossible for me to know as of now what those could be.