To Best Handle Taxes as a Real Estate Agent, you have to treat your earnings like business income rather than salary. You need to pay yourself a set salary from your earnings. You must budget the rest for business expenses. You should make your salary high enough if possible to fund savings and retirement accounts. Besides, keep your personal bank and credit accounts as separate from your business accounts. In addition, maintain meticulous records of every cent that comes in and goes out. You can save commission statements. You have to keep receipts for every business purchase as well as for personal purchases that may be tax-deductible.
Other than that, use finance software to track all your financial information, both personal as well as business to generate financial reports. You need to devote an hour once every week or two to organizing statements as well as receipts and entering information. Moreover, file quarterly tax returns to save the penalties as well as interest the IRS charges sole proprietors who file annual returns. Furthermore, save for retirement. You must investigate tax-advantaged options available to sole proprietors. You should make maximum allowable contributions. Otherwise, know your deductions. You can Deduct qualified business expenses.