Hello all. I was wondering if you more experienced agents found the need to incorporate or form an LLC? Also since we are all licensed is it available for us to form a professional LLC similar to doctors and lawyers. I have looked all over the web and have yet to find any information on the pros and cons for this matter as it relates specifically to real estate professionals. Thanks in advance for your time.

While I thank you for the time it took you to post this Jflynn this is just more of what I already know. I was hoping for something a little more specific to real estate agents.

Most agents use an llc structure.

As an agent we are self-employed,you can cut your self employment tax in half by paying 50 percent of dividends to yourself and 50 percent to the corporation.Basically with a corp you are using alot of expenses as business writeoffs so you won't pay tax on spending that income.

You can make didvidends whatever you want but go more than 50/50 and the irs starts looking at you real close with an audit.Some people like to expense everything out and say they didn't make anything and the irs isn't stupid.

The first few years they expect a corp. to break even or lose money after that they expect some profit to start rolling in.

My husband does IT and I do real estate with are S corp. and Inc. From what I understand we do deduct all the expenses and also pay dividends at the end of the year...best person would be your CPA who can look up your income and expenses and help you decide the type of the company you should incorp.

Good Luck