Most agents get paid by their brokerage on a 1099 with nothing withheld. Commissions come in lumps, expenses run all year, and the tax bill lands in April. We set it up so a good closing does not turn into a penalty.
Book a Free 15-Minute ConsultationA licensed agent paid on commission under a written contract is treated as self-employed for federal tax. That means about 15.3% self-employment tax plus federal, New York State and, if you live in the city, New York City income tax. Agents in the city with more than $150,000 of net self-employment earnings also owe the MCTMT. We suggest setting aside a share of every commission check and sending it with the quarterly estimate. If your closings bunch up late in the year, the annualized income method can reduce penalties for the early quarters.
Not always. New York City's Department of Finance has a safe harbor: an agent who holds one salesperson or associate broker license, works with only one brokerage at a time, and meets the other conditions in its audit guidance (office hours or goals set by the firm, firm-provided desk and materials, listings approved by the firm, limits on your own advertising and staff costs) is treated as an employee of the brokerage, and the brokerage work is not subject to UBT. Agents outside the safe harbor are judged on the facts and may have to file a UBT return once gross business income is over $95,000. Side activities like flipping or development are looked at separately.
Sometimes, once profit is high and steady. Before you form anything, check whether your brokerage can pay commissions to your company under New York licensing rules and its own policy. If it cannot, the S corporation does not help. We run the numbers and the practical side first.
| Payroll | $275/mo incl. 1 employee, + $15 each additional |
| Payroll problem fix (late 941 / NYS-45, missed deposits) | review $350, catch-up starting at $750 |
| Quarterly estimated tax plan | starting at $200 a year |
| Bookkeeping | starting at $300/mo |
| Bookkeeping + Payroll | $475/mo incl. 1 employee, + $15 each additional |
| Business tax return | starting at $1,000 |
| Personal tax return | starting at $300 |
| Entrepreneur Starter Kit | $1,500 one time |
| Tax debt review (IRS or NY) | $400, credited toward the fix |
Tax returns and bookkeeping are "from" prices. You get an exact quote in writing before any work starts. Full price list
Usually yes. Brokerages do not withhold tax from 1099 commissions, so if you expect to owe $1,000 or more federally or $300 or more to New York, quarterly payments avoid an underpayment penalty.
Not if they meet the Department of Finance safe harbor for salespeople and associate brokers, which treats them as employees of one brokerage. Agents who do not meet it are judged on the facts and may need to file once gross business income is over $95,000.
Only if the numbers work and your brokerage can legally pay commissions to your company. The savings come from self-employment tax on profit above a reasonable salary, but payroll, a business return and NYC corporate tax add cost.
Personal returns with a Schedule C are quoted after we see your documents; personal returns start at $300. Quarterly estimate plans start at $200 a year.
63-08 Woodhaven Blvd, Rego Park, NY 11374 · Get directions →