Well, its that time again... anyone learn any tax tips this year? Any tips that you have learned in previous years? Also can someone please explain to me that benefits of creating an S corp? Please don't say "talk to a tax professional" I hate that. Nothing you post should be taken as tax advice, consider thiat a disclaimer.

Are you a business owner with shareholders?

In lots of instances your corporation can deduct expenses that you cannot personally (as a sole proprietorship)

http://www.irs.gov/newsroom/article/0,,id=97322,00.html

"Health Savings Accounts

The Medicare Prescription Drug, Improvement, and Modernization Act of 2003 created a new, tax-advantaged way for certain people to save for health care expenses. You must be covered by a high-deductible health plan to open and contribute to a Health Savings Account (HSA). IRS and Treasury have provided guidance on how HSAs work."

In some cases it may not be too late to defer taxes by contributing (and creating) to a SEP or IRA.

https://www.bcmadvisors.com/sep-ira.htm

"What is a SEP IRA?

SEP IRA (Simplified Employer Pension Plans) are retirement plans that are ideal for small business owners and self employed individuals. A SEP IRA allows individuals to make contributions of up to $42,000 for 2005 ($44,000 for 2006) into their own and their employees' retirement accounts. SEP plans allow a much larger contribution than a Traditional or Roth IRA with a comparable amount of paper work. Self employed or owner only businesses may also want to consider a Self Employed 401k / Solo 401k."

Appears to be a moot point....

You eliminate Self employment tax with a S-Corp...

I don't think you can eliminate it completely, but you can reduce it.

There is a CD+DVD+Book course for $395 that is the absolute best resource for this question. We had a guest speaker at one of our meetings touting it. I bought it and give it 4 stars. It covers everything from methods of incorporation, to deductions you never knew about, to record-keeping. And it's for business owners only (which you are, as a Realtor). Most of the course you learn in the car on CD lessons while you're driving around. You WILL save thousands by using this course, so it's cost is really free, AND it is, of course, deductible. It also includes one year of their free newsletter also. And the newsletter is very good. Taxes are dry and boring, but after going through this course, you will be excited and motivated about your taxes. Seriously. By the way, I have always prepared my own taxes (personal and corporate) and I thought I knew pretty much everything I needed to. Wrongo! I estimate that using new information I gleaned directly from this course, I will have $7,000 or more in new deductions this year. Wicked!

What is it called? I forgot, it's in my car. But I will get it and post it later.

If you haven't already, form an LLC.

Set up a SEPP (self employment pension plan).

I have an LLC that is taxed as an S-corp because the S-corp pays corporation taxes on profits. Self employment taxes are much higher than this. I pay regular income tax on the salary I provide to myself, which won't be the entire commission I've made. I think my CPA recommended a salary around 18-24k, the average agent salary.

I also have a SEP-IRA which allows up to 44k contributions a year. I use Fidelity. The Health Savings Account is my next move.