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Taxes: What's The Norm?

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Andrew Pelto

Freshman Member
Joined
Apr 2, 2003
I am just about to finish the Allied course and will be looking for a mentor soon.
My question is: How do most Appraisers/trainees handle their taxes?
Do you set aside a % and pay quarterly? If so, what % is safe?
Also, down the road, would it be a good idea to incorporate?

I would appreciate any thoughts or advise.

-Andrew in Sacramento
 

Frank Lostracco

Junior Member
Joined
Mar 13, 2003
Professional Status
Certified Residential Appraiser
State
New Jersey
Hello Andrew,
There is no norm when paying taxes. Usually the more you make the higher the % you pay. Fortunately for you as a trainee you will not earn much in the early stages so taxes should not be a problem. :(
When the cash starts rolling in see a CPA.
 

Bobby Bucks

Elite Member
Joined
Jan 27, 2002
Professional Status
Real Estate Agent or Broker
State
North Dakota
I don't see anything in USPAP that says we have to pay taxes.
 

wyecoyote

Senior Member
Joined
Jan 15, 2002
Professional Status
Gvmt Agency, FNMA, HUD, VA etc.
State
Washington
Andrew,

Depends if you are an independent fee appraiser or an employee. Consult with a CPA on how much to set aside if Independent Fee and taxes are not with held. As far as a "safe" percent when I started the CPA I talked to said 30% and pay monthly (by the 15th).

Bobby,

And USPAP does not say we have to charge for our services. :beer: :p

Ryan
 

Bobby Bucks

Elite Member
Joined
Jan 27, 2002
Professional Status
Real Estate Agent or Broker
State
North Dakota
Frank is correct ........ in the early stages of this business taxes are not a problem.

Ryan I've been waiting for years for a post that I could wave the USPAP flag over and this was it........I can see me now before an IRS goon squad holding my tattered copy of USPAP 2003. :)
 

hal380

Senior Member
Joined
Apr 26, 2003
Professional Status
Certified General Appraiser
State
Connecticut
I have a side business of paying taxes for people. So what everyone needs to do is to send me your estimated taxes, and I will forward to the gubment. The best feature of this service is that we put you on our auto pay program. All you have to do is send in a voided check and we will set you up on EFT. This will avoid me having to charge you a late payment fee.

Is this expensive? you ask

Not at all! Our fee is automatically withdrawn from your account, and is only 1% of your estimated tax.

For a limited time only.....................The next 50 people to enroll will recive, at no additioal charge, a P.T. Barnum coffee mug.

Now dont be cought out in the cold with passed due taxes, sign up now. :usa: :usa: :usa:
 

Mike Garrett RAA

Elite Member
Gold Supporting Member
Joined
Jan 14, 2002
Professional Status
Certified Residential Appraiser
State
Colorado
If you are paid as an independant contractor on a 1099 the IRS requires you to file quarter estimates along with a tax deposit. Check with your accountant. At one time there was no penalty for not filing quarterly if you paid your taxes when due. Not sure if that is still the case. In any event, I would not even try to figure out the tax codes without assistance.

If you incorporate you will need to do all sorts of fun tax stuff. As a sub chapter S Corp you will be asked to establish a salary and pay monthly federal withholding.

Fed Withholding (monthly)
FICA Withholding (quarterly)
State Withholding (quarterly)
Federal Unemployment (annually)
State Unemployment (quarterly)

For each tax there is a corresponding tax report most of which have stiff penalties for non-filing. As an example my state unemployment tax based on a $2,500 monthly salary is less than $7.00 a quarter....but if you fail to file the report on time (quarterly) the penalty is $50.

I recommend an accounting program such as Quick Books Pro if you ever think you are going to have employees. Even though you can do it all yourself an accountant is worth the expense especially for your annual tax returns.
 

Todd Yurenka

Freshman Member
Joined
Feb 3, 2003
Professional Status
Certified Residential Appraiser
State
Michigan
What if you're a payroll employee? What type of deductions can you make?
 

Mountain Man

Elite Member
Joined
Jan 15, 2002
Professional Status
Certified General Appraiser
State
Georgia
Starting off, I was a "Sole Proprietor" and I paid taxes yearly. I took 1/3 of my monthly check, and stuck it in a money market. Always had more than enough to pay taxes, after my expenses and such were figured. As earnings went up, at the direction of my CPA, I paid quarterly. Then I incorporated, and although I am the CEO, I'm now an employee of "the company". Taxes are now paid monthly. But "the company" has taxes to pay too. So you need a good CPA to help you when you get to this level. Not only to show you the in's and out's of all the tax paper work, but to also show you how to figure expenses so you don't get killed with taxes. My “company” reimburses me for milage, office rent, and all expenses before I get a pay check.
 
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