By Michael R. Siegel, Esq.
Real Estate Agents (Agents) have three core reasons to form and operate as an LLC: Professionalism, Liability, and Taxes.
Most Agents are independent contractors. The biggest trap an independent contractor faces is the mingling of personal and professional life. The single biggest step towards professional success is to act and appear professional. One way to act and appear professional is the way you dress and present yourself. The other way is to transition from your private self to your professional self. Setting up an LLC provides the legal structure for such a transition. It’s a structure separate from your private life, and a mechanism for creating a separate identity with its own tax ID number, checking account, and expense accounting. Thus, you dress and act the part with impunity, and a formal structure to back it up.
Independent contractors have much more freedom than salaried employees, but with greater freedom comes greater responsibility. If something goes wrong and you are an employee, you are part of a business that is liable for your actions. If something goes wrong, and you are an independent contractor, your personal assets are exposed if you do not have a corporate entity to protect you. Operating as an LLC provides you with an entity that protects your personal assets, a separate entity from yourself that is liable for you.
An LLC not only offers you professional structure and liability protection, it also offers you certain tax advantages. One is providing a structure that saves you money on self-employment taxes. Another is providing you a business record of your business expenses. Thirdly, LLC’s are pass-through entities, and when you pass the LLC’s profits into your own pocket, as a pass through there is only one taxable entity, and that’s you.
Our office specializes in setting up business entities and we can help you create a suitable business structure that makes you more professional, protects your personal assets, and provides you with tax advantages. We have a special offer for Real Estate Professionals. For $125, plus state filing fees, we will prepare, file and establish a business entity for you, and we provide you with continuing counsel as you launch and operate your separate business entity.
Michael R. Siegel is an Attorney and Counselor at Law, Licensed to practice in the State of New York, the Eastern and Southern Federal District Courts in New York, and the Supreme Court of the United States of America. He received his Juris Doctorate from the Benjamin N. Cardozo School of Law, Yeshiva University in May of 1999, and has been in private practice since January of 2000. Prior to becoming an attorney he was an administrator at New York City Parks and Recreation where he had a long career in Public Service, starting as a New York City Urban Park Ranger in 1979, he became a Mounted Urban Park Ranger, NYC Park Historian, Assistant to the Brooklyn Borough Commissioner of Parks, Director of Capital Projects for Brooklyn Parks, and was Chief of Staff for Brooklyn Parks when he left Parks & Recreation to attend Law School in 1996.
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