Florida Real Estate Professional Become a PA, LLC or stay a sole proprietor?

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.

The Florida Statute allows a  licensees to choose:
Professional Corporation (PA)
Limited Liability Company (LLC) 
Professional Limited Liability Company (PLLC)
Florida licensing law requires that each licensee be issued a license in their legal name, if properly qualified the legal entity designation may be added to the license. No trade names allowed.
You should seek the advise of their Accountant in deciding which corporate structure works best for their situation.  In order to ensure that the process is done correctly, the licensee’s attorney or accountant can set everything up for a fee.

Step One: Corporation created through the Florida Department of State’s Division of Corporations website.
Step Two:  Articles of Incorporation have been created
Step Three: Create a federal tax identification number on the Internal Revenue Service website.  
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).  
Step Five:  IRS W-9 form is created and the process is now complete from a legal standpoint.
Step Six:  Create a business bank account.  The bank will require the Articles of Incorporation and IRS tax identification number in order to open the account and request a credit or debit card strictly for business purposes.

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.

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