The majority of Real Estate Licensees in Florida are independent contractors and one of the important consequences of this model is that the licensees are responsible for paying their own taxes to the IRS. One of the requirements under Internal Revenue code is that there must be a written agreement between the Broker and Associate with the verbiage affirming this business arrangement. The IRS has specific guidelines to determine how to qualify as an independent contractor.Florida license law allows sales associates and broker associates to incorporate as individual licensees for the tax benefits and personal risk reduction. This can afford tremendous tax savings and protect personal assets.
Step One: Corporation created through the Florida Department of State’s Division of Corporations website.
Step Two: Articles of Incorporation have been created
Step Four: The licensee is now ready to have the licensee reissued by the Florida Department of Business and Professional Regulation in the name of the corporate entity, which must be the legal name with the proper entity designation (Ceiliah Epner, PA).
Now that the licensee is a business entity, business cards, signs and advertising are required to reflect the new corporate name. The brokerage will be paying the corporation, and the corporation will be the employer of the individual. There are filing of quarterly taxes.