tax tips for


Utilize these nine strategies to lessen your tax expense REALTORS


Working for yourself is the American dream, but it also means you are often your own accounting department and benefits department. Fortunately, the IRS provides ample opportunities for small-business owners to minimize their overall tax burden. You should work closely with your C.P.A. to ensure you are taking advantage of every legal deduc- tion. Here are nine valuable tax tips to start that conversation.


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number one TAKE ADVANTAGE OF


RETIREMENT ACCOUNTS. Since real estate agents are often self-employed, most


of you do not have an employer who will automatically enroll you in your company’s 401(k). This means you have to take charge of your own retirement savings. One of the easiest plans to administer is a Simplified Em- ployee Pension (SEP), which allows you to make tax-


12IGEORGIA REALTOR®


deductible contributions. In 2014, you can defer up to 25 percent of compensation, provided the contribution does not exceed $52,000. If you are able to contribute a substantial amount, this can significantly lower your taxable income. Additionally, retirement accounts can help you diver-


sify your portfolio. Many agents also dabble in real estate through investment properties. This means both your investments and income stream have significant exposure to the commercial real estate or residential housing mar- kets. While you may be most comfortable investing in an industry in which you have a deep understanding, it is important to diversify across multiple asset classes and multiple sectors. When one sector is out of favor, others


NOVEMBER I DECEMBER 2014


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