Florida REALTOR Incorporation Made Easy - Everything you need is right here
From Concept to Corporation: Your Comprehensive Resource for Florida REALTOR Incorporation Success
Benefits of Incorporating Your Real Estate Business
Tax Savings
Reduce the 15.3% tax paid by sole proprietors. Enjoy pass-though tax treament with an S Corp.
Asset Protection
Protect your personal assets. Both P.A.s and LLCs allow owners to separate and protect personal assets. Operate under a corporate veil to help protect your personal assets.
Business Funding
Today even brand new corporate entities can secure business funding to help grow their business. Funds can be used for any reason.
Retirement Savings
A Solo 401K is a traditional 401(k) plan covering a business owner with no employees. Max contributions in 2024 are $23,000. More if over 50.
Increased Credibility
With only about 15% of all Florida REALTORS being incorporated, you will stand out and add credibilty to your business.
The 6 Important Steps AFTER You Incorporate
Secure Your EIN
Your EIN is Your Tax ID for your new Entity. You need an EIN to open a business checking account. It is how your entirty is known to the IRS when you do your Corporate Tax Return
File for S Corp
S Corp status is "elected" by submitting IRS Form 2553 to the IRS. This is the means for which you enjoy flow through tax treatment and save on self-employment taxes
DBPR Compliance
DBPR requires that you notify them anytime a change is made to your license. DBPR Form RE-16 informs them that you are now operating as a P.A. or an LLC and they will update your license accordingly
Update W-9 with Your Broker
IRS Form W-9 is where you inform your Broker to pay your new Entity on your next closing. They will now pay your P.A. or LLC and tag that payment to your new EIN and not your Social Security Number
Open a Business Checking Account
You will want to start depositing all your checks into a business checking account as well as pay all of your Real EState expenses through it. Check Resources for Bank Account Rebates when you open a new business checking account.
Confirm Completion of above
Complete the 5 steps above to enjoy all the benefits of being incorporated. The state of Florida does have an annual compliance requirement called an annual report. It is due no later than May 1st in each year stating in the year AFTER you incorporate.
Useful Information
P.A. vs LLC
Both P.A. s and LLCs offer very similar benefits. Most Florida REALTORS choose
the P.A. simply because it is less expensive and only 4 other groups of professionals can have a P.A. in Florida (Doctors, Lawyers, Accountants and Architects).
C Corp vs S Corp
When a Corporation is first formed it's default status is a C Corporation which is subject to double taxation so most clients choose to elect to be taxed as an S Corp to avoid this. S Corps enjoy pass through tax treatment.
DBPR Dos and Don't s
Entity must be in your name, must be soley owned by the licensee, can only conduct licensed activities, can only receive Real Estate commissions paid by their broker.
Next Steps - Maintenance
Once properly established you only need to do 2 things each year. 1. File a corporate income tax return each year by 3/15 and file an Annual Report with the state no later than 5/1.