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Five Options for Dealing with Debt
Wednesday, July 15, 2018 at 11:00 AM PDT With $1 trillion in credit card bills outstanding in the United States, credit card debt is one of the single biggest financial challenges facing Americans. In this webinar, Lynnette Khalfani-Cox, The Money Coach, will teach participants: The five main options they have for eliminating and managing debt -- and the pros and cons of each strategy The financial, credit and tax ramifications people should consider when tackling debt The legal rights afforded to those in debt Lynnette knows first-hand about getting out of debt. Back in 2001, she owed $100,000 in credit card debt, before paying it all off in three years – without ever missing a single payment. Now she shares the secrets to getting out of debt that anyone can use to become debt-free. Register now!
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Best Apps to Track Your Business Expenses: Expensify and Mile IQ
My last article was about adding a communication platform using Slack to help you run your business. This week, it's about something most of us are terrible at doing--accounting and business expenses. I have been fortunate that a couple of my contract jobs used Expensify, and it made my job so easy by keeping records and recording expenses, so I wanted to share.
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5 Important Tips When Hiring a CPA to Prepare Your Taxes
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Get Ready to Knock Your 2019 Taxes Out Cold with These Apps!
Sometimes in real estate you have to learn to roll with the punches, but other times your success can be assured with a little advanced planning. For tax purposes, that means choosing a good expense-tracking strategy before the year is too far along. So, let's get ready to itemize with this list of popular, well-reviewed expense tracking apps!
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5 Steps for Planning Your 2019 Real Estate Marketing Budget
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It's Tax Season: Tax Preparation for Real Estate Agents
We hate to burst your happy bubble, but tax season is upon us. Here are some ways that real estate agents can easily and (fairly) painlessly prepare for tax season. Start Tracking If you haven't done so already, start tracking items that can be deducted. The best thing to do is keep track of all your expenses as you accumulate them. But if you haven't, don't worry! You can use this advice to get a jump start on tracking expenses in 2018. Here's an idea of just some of the business expenses you can be tracking:
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Managing Your Commission to Last the Year
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10 Easy Ways Agents Can Run a More Profitable Business
There are some simple, yet essential ways to make sure your business is as profitable and thriving as it can be. These ten tips will hopefully serve as a checklist for when tax season comes around, as well as the rest of the year, in order to prepare and set your business up for the brightest possible future.
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Five Expense Tracking Apps to Prepare You for Next Year's Tax Season
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4 Ways Real Estate Agents Can Better Manage Their Wealth
Real estate agents are exceptional at helping people secure what's often the single biggest investment of their lives – their home – but they're often not as adept at managing their own wealth. Wealth means different things to different people, but ultimately wealth comes down to the choices you make in life and what options those choices allow you to pursue. One of the biggest options is an individual's plans for their retirement and the challenges that everyone faces in preparing for a retirement that's satisfying. But for real estate agents, the challenges are even more daunting: being most likely 100 percent commission based, agents don't have pensions, and for those under the age of 50, there's a realization that the overburdened Social Security system won't likely be paying out the way it did for our parents and grandparents' generations. The social structures that have supported retirement are changing, and as if that weren't enough of a challenge, expenses in retirement are only going up. So with more expensive retirements and less resources to tap to fund our lives in retirement, we are at a unique point in history where we all will need to take a greater personal responsibility for our own retirement. And again, this is nothing more than a reflection of the choices we make throughout our earning years. To respond to the changing retirement landscape, here are four ways that real estate agents can better manage their finances today and into their retirement. Get clarity: This is the most important first step that every real estate agent needs to take. Before you can do anything, you really need to be very clear on what your story is for your future, and what your story is for your retirement. Generally, we all have this vague notion of retirement – a vision of playing golf, spending time with the grandkids – and yet, we don't examine the nuts and bolts of what does that really look like or whether it's realistic in the context of a financial analysis. Look at your three buckets: When examining your retirement, look at the three buckets that determine your wealth: career, retirement and your expenses. For example, in terms of your career bucket, how much career is left for you or how many years of earning potential do you have left? Then you have to look at your career trajectory. For the average 53-year old real estate agent, who's pretty far along in their career and doing more listing business than working with first-time home buyers, these could be their prime earning years. But it depends on your story: you could be an agent with kids in college, or bringing in a junior partner, and it all comes down to what do you have to accomplish and how long do you have to accomplish it. Younger agents benefit from focusing on their expenses. Early in your career as an agent, there are many significant and predictable expenses that can be expected. Paying for college for your kids is most often one of those – that looming, terrifying number that we've heard about on the news, yet we haven't really tackled it. One client of ours, a real estate agent, has three kids – ages 8, 6 and 4 – so they have some time before they start writing checks. Yet there is a benefit to determining what their philosophy is now. Is it helping to pay for a portion of their kid's college education or paying for all of it, and what could the cost of college look like in 10, 12, 14 years from now? Understanding their philosophies is key to creating the right financial model. And that approach allows us to help them move into tactics, such as a starting a 529 Plan for college savings, to get them where they want to be. Diversification is crucial for your portfolio. This is often a big challenge for real estate agents, as they invest in what they know best – real estate. However there's an important reason why it's vital for real estate agents to have diversification across many asset classes: Call it "Modern Portfolio Theory" or simply call it capitalism, but the important point is that if one asset class were always the best asset class, then all the money would go there. And while there are many times when real estate is great, there are times when real estate has its challenges. The other big potential drawback of having all of your assets in real estate is liquidity: when you have an emergency and you need liquidity, it's very challenging to generate that cash if your balance sheet is entirely illiquid assets. That's why having a balanced portfolio with investments across all asset classes - cash, stocks, bonds, real estate and alternative investments – is important for liquidity and over time, will help real estate agents achieve their goals. What that right balance is can be different for every agent, based on their story and what they want to accomplish. Retirement is that incredible time in your life when you transition from working for your money, to your money working for you. It's why investing time now to take these necessary steps will ensure you know your story and how you want it to turn out. This is what Opes Advisors does uniquely for real estate agents with our AgentWealth program, providing the personal advice combined with the latest technology to run all the "What if?" scenarios that every individual story may have. In the end, retirement shouldn't be something you fear, because if you know what's really important to you and you take the right steps, retirement can be genuinely satisfying.
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The Power of Automation: Sync your transactions to QuickBooks
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Real Estate Agent Tax Tips: Are You Really In Business?
Many real estate agents work only part time, or work at real estate for a while and then leave the field. If you're in this situation and you don't earn a profit from your real estate activity, the IRS could claim that you are not really in business. Let's go over how to handle this, as well as some other important real estate tax tips. Real Estate Agent Tax Tip: How to Prove You Are in Business For tax purposes, a business is an activity you regularly and continuously engage in primarily to earn a profit. You can't get a real estate license, sit back and do nothing and then claim you had a profit motive. This won't pass the "smell" test. You need to be able to show that you were actively working to make money by trying to obtain listings or close sales or something else. It's also not necessary to show a profit every year to qualify as a business. You just need to be able to prove that your primary purpose is to make money. Many businesses have losses in their first year—and some may continue to have losses on and off for years afterwards. That's okay as long as you can establish that your intent was to earn a profit. Your real estate business can be conducted from home, full time or part time, as long as you work at it regularly and continuously. And you can have more than one business at the same time—many real estate agents work part time and have other businesses or jobs. However, if your primary purpose for being a real estate agent is something other than making a profit—for example, to incur deductible expenses—the IRS may find that your activity is a hobby and not a business. If this happens, you'll face some potentially disastrous tax consequences. Example: J. Thomas Orr, a Los Angeles schoolteacher, obtained a real estate broker's license, apparently with the goal of working part time at the activity. Unfortunately, he was not successful. For two years, he obtained no listings and sold no real estate. His only income from real estate was $150 for doing an appraisal. Nevertheless, he claimed he had over $5,600 in deductible business expenses from his real estate activity. The IRS and tax court concluded that Orr's real estate activity was not a business because there was no evidence he engaged in it in an organized, businesslike manner to earn a profit. All his business expense deductions were disallowed. (Orr v. Comm'r, 64 TCM 882 (1992).) The IRS has established two tests to determine whether someone has a profit motive. One is a simple mechanical test that looks at whether you have earned a profit in three of the last five years. The other is a more complex test designed to determine whether you act like you want to earn a profit.
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Friday Freebie: This App Keeps Track of Your Mileage Deductions So You Don't Have To
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5 Tools Real Estate Agents Will Love
Maybe it's because we've just entered the fourth quarter of 2016, but our minds have recently turned to how agents can maximize what's left of the year and come out ahead in 2017. Part of this involves being mindful of your finances, and staying on top of new channels for marketing your business. To that end, we've rounded up a few apps and online tools that can help. Several of these apps can help soothe the tax-related stings of being an independent contractor, while others are excellent weapons in your marketing arsenal. Read on to learn more! 1. MileIQ - Driving to showings and client meetings is a huge part of an agent's job. In fact, the average Realtor qualifies for over $16,000 in mileage deductions every tax year. But the IRS has strict rules that require taxpayers to keep detailed records of business related drives in order to be eligible for mileage deductions. MileIQ takes the hassle out of record keeping by automatically tracking and logging all of your business drives for you. The app not only tracks the distance driven, but the route and potential deduction value of each drive. MileIQ's mileage log meets IRS requirements for record keeping--protecting you in case of an audit, and potentially saving you thousands of dollars every year. To learn more about MileIQ, read our product review. 2. Painless 1099 - Speaking of accounting related issues, as independent contractors, agents are no strangers to the challenge of paying quarterly estimated taxes. If you've ever struggled with putting the correct amount of money aside for your taxes, Painless 1099 can help. The service processes your commission checks (or any other income sources), deducts the taxes and deposits them in a savings account, and then deposits the remainder to your regular checking account. When it's time to pay your taxes, you can pay them from your Painless 1099's savings account in just one click.
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Product Review: MileIQ Is a Hassle-free Way to Track Your Mileage Deductions
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6 Ways a Mileage Tracking App Saves Agents Time and Money
One of the things we often hear from customers who are skeptical of our automatic mileage tracking app is that they simply don't need it. After all, why use MileIQ when they can keep a good old fashioned mileage log with pen and paper? Another comment we hear quite often is that people who drive for work can simply use their car's odometer for mileage tracking. At first, this sounds entirely reasonable, but once you dig in and look at the numbers, you can quickly see that a mileage tracking app like MileIQ not only can save you boatloads of money at tax time, but also puts valuable hours back in your day. 1. Saves You From an IRS Nightmare The IRS is famously skeptical when it comes to taking a mileage deduction. That's not to say that they don't want you to take it – it's written into tax code after all—it's just that they know a lot of folks try to be, shall we say, overly generous, with it. For that reason, the IRS requires some pretty specific information to be recorded for each trip you plan to deduct—something a mileage tracking app can do automatically. If you fail to record the right information in your mileage log and are audited, not only will you lose the deduction, but you'll also receive a penalty. So what information does the IRS require? At a minimum, you'll need to record the miles you drive, dates of each trip, the places you drove and the business purpose of the trip. Additionally, the IRS want to know the total miles you drive for both business, commuting and personal reasons. It's a lot to keep track of! Sure, you can use a paper log to do that, but eventually that gets cumbersome and you start forgetting to record drives, or worse, guessing at the end of the year. A mileage tracking app automates this process. It runs in the background on your phone and records every single drive you take. Then you can easily classify them as business or personal—with our mileage tracking app that's as simple as swiping left or right—and have an IRS-compliant log at the end of the year.
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5 Tips to Separate Business Expenses from Personal Expenses
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When Can Your Clients Deduct Moving Expenses?
The article below is aimed at consumers, but we thought our audience of agents--especially those specializing in relocation--would find it helpful. After all, agents get asked all kinds of questions by their clients, including advice on moving. This post summarizes when it's legal for homeowners to deduct moving expenses on their tax returns. Feel free to share it with your clients! Summertime is the time of year when people move the most. Moving is a lot of trouble and can also be very expensive. If you move to start a new job or to work at the same job in a new location, the cost can be tax deductible. To qualify for this deduction, you must satisfy two tests: the distance test, and the time test. Distance Test To deduct your moving expenses, your new workplace must be at least 50 miles farther from your old home than your prior job location. For example, if your old job location was three miles from your old home, your new job must be at least 53 miles from your old home. If you had no previous workplace, your new job location must be at least 50 miles from your old home. If you go back to full-time work after a substantial period of part-time work or unemployment, your place of work also must be at least 50 miles from your former home. Time Test If you're an employee, you must work full-time at your new job for at least 39 weeks the first year after the move. If you're self-employed, you must also meet this test. In addition, you must work full-time for a total of at least 78 weeks during the first two years at the new job site. If your tax return is due before you meet the time test, you can still claim the deduction if you expect to meet it. There are exceptions to these rules in case of death, disability and involuntary separation, among other things.
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QuickBooks integration for your real estate back office (8/17)
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Agent's Guide to a Pain-free Tax Season
Tax season is almost over, with mere days to go. Most of you have probably filed already or are nearing the finish line. For you procrastinators, there's still time to get your receipts and statements in order--but just barely. At this late stage, your best bet is to file an extension and hope your CPA doesn't charge too much of a premium for last minute tax return preparation. But don't wait--the longer you put off getting information to your accountant, the more stressful even filing just an extension becomes. If you find yourself putting off your taxes until the last minute every year, ask yourself why? Perhaps it's that your financial record keeping is less than stellar, and gathering all the documents your accountact needs is a huge headache. There's good news, though: tax season doesn't have to be painful. If you're overwhelmed every time April 15 rolls around, don't be. A little organization can help a lot! Begin by classifying all your business expenses. Since real estate agents are considered statutory nonemployees, keeping track of expenses for tax deduction purposes is vital. Have your bank and credit card statements handy, as well as any receipts. Comb your records for business expenses. As a starting point, use the following categories to classify each expense: Operating Costs - These are administrative and general office expenses like desk fees, postage, web hosting charges, software fees, business cards, and more. Advertising and Marketing - It's as important to track your marketing expenses as it is to measure the results of every channel you market on. That way, you can make smarter decisions on where to spend your money in the future. These expenses include staging costs, open houses, flyers and brochures, pay-per-click ads, meals and entertainment, listing and lead generation services, and more. Professional Fees - MLS and association fees, health insurance, continuing education, business travel costs, seminar fees, licenses, and more. Communications - How many ways are you communicating? Your cell phone plan, internet access, email newsletter costs, and landline charges are all tax deductible. Equipment - You can also deduct the cost of your monthly mobile monthly service charges. If you bought a new cell phone during the 2015 tax year, you can deduct the purchase price, too. The same goes for printers, scanners, fax machines, computers, tablets, office furniture, and more. We recommend consulting a tax professional for the best advice, of course, but this should start you off on the right foot. Want to learn about apps that can help? Click through to the next page!
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Friday Freebie: Track Your Marketing ROI with this Worksheet
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Tax Tips for Agents – Part 2
This is the time of year most real estate agents dread – even more so than mid-June, September and January when quarterly tax payments are due. April's tax return determines what those quarterly payments will be, so naturally, right now agents are wondering about ways to turn expenses into deductions. Forty-five million Americans claim more than $1 trillion in deductions on their itemized tax returns. An additional 92 million taxpayers claim $700 billion using standard deductions. IRS insiders, however, believe that millions of Americans pay more in taxes than they should by not taking all of the deductions to which they are legally entitled. Last week we presented several deductions that agents often overlook when squirrelling away receipts to give to their tax preparers. This week, we'll offer some tips that may surprise you. Home Office and Broker's Office Although we discussed the deduction for the business use of your home last week, there's more to the story. Real estate agents who work both from their home and from their broker's office may still qualify for the home office deduction, as long as they meet "the principal place of business test." To determine if you pass that test, the IRS will look at the importance of the activities that you perform at both places and the amount of time you spend in each location. Administrative and management activities are what the IRS considers "significant" enough to qualify you for the deduction. These include: Performing bookkeeping and recordkeeping. Paying bills connected to your business. Setting appointments (all of a sudden cold calling looks even more important!). Maintenance of your CRM. Reviewing real estate-related literature, such as publications or continuing education materials. As long as these activities are performed routinely at home and not your broker's office, you qualify for the deduction.
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Tax Tips for Real Estate Agents – Part 1
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Organize Your Way to a Painless Tax Season
Tax season is almost over, with less than a month to go. A pat on the back to those of you who've already filed, or at least have their tax return underway! For you procrastinators, there's still time to get your receipts and statements in order. But don't wait--the longer you put off getting information to your accountant, the more stressful the tax preparation process becomes. Perhaps your financial record keeping was less than stellar last year. Tax season doesn't have to be painful. If you're overwhelmed by gathering all that your accountant needs to prepare your return, don't be. A little organization can go a long way! Begin by classifying all your business expenses. Since real estate agents are considered statutory nonemployees, keeping track of expenses for tax deduction purposes is vital. Have your bank and credit card statements handy, as well as any receipts. Comb your records for business expenses. As a starting point, use the following categories to classify each expense: Operating Costs - These are administrative and general office expenses like desk fees, postage, web hosting charges, software fees, business cards, and more. Advertising and Marketing - It's as important to track your marketing expenses as it is to measure the results of every channel you market on. That way, you can make smarter decisions on where to spend your money in the future. These expenses include staging costs, open houses, flyers and brochures, pay-per-click ads, meals and entertainment, listing syndication, lead generation services, and more.
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5 Things to Look for in a New Remote Bookkeeper
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Budget Season: Will You Be Making These 3 Marketing Expenses?
I recently spotted an article on Mashable that listed three marketing expenses as "must-haves" for the upcoming budget season. I'm going to discuss each and then ask you to weigh-in on whether or not they'll appear in your budget. 1) Social Media What should you be doing? According to Mashable, you'll want to look at your current social media presence to determine if you are optimally represented. If you don't have a profile on any of the primary social networks, or if you've been inactive on any of these networks, it's time to step things up. Begin to post regularly. This may mean creating content on your blog or website and then feeding links to that content to social media profiles – that's content marketing, which we'll talk about next. You may also want to consider advertising on social media (i.e. "promoted posts" on Facebook). Where's the expense? For many agents, there may not be any direct costs associated with social media marketing; instead, the expense lies in the resources you'll need to allocate. For instance, you'll need to spend some of your own time or that of an employee in order to build your social media presence. Direct costs might come from advertising on social media, if you decide that makes sense for you. 2) Content Marketing What should you be doing? Content marketing is exactly what it sounds like – creating and sharing content (i.e. on a blog or website) to educate and inform, while at the same time marketing yourself, your services, or your individual listings (in the case of real estate professionals). This content may take the form of a written article, a video, a podcast, photos, an infographic, or . . . (you take it from here; let your imagination run wild). Where's the expense? If you don't have the time or the inclination to create content on your own, you may need to hire someone else to do it. If that "someone" is already a member of your staff, the expense is represented in the use of their time. However, it's not uncommon to outsource content creation. RISMedia's RESource is a great example of a service that can help with this.
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Was the iPad Built for the Real Estate Professional?
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3 Tech Solutions for Tax Season Woes
I have a heavy feeling deep down inside. It’s too late to be the effects of holiday gluttony, so how do I account for this painful knot in my stomach? Oh wait – I understand now – it’s time to start thinking about tax season! If the thought of preparing your taxes fills you with dread (like me), you may want to consider some tech tools that just might make it a little less painful. 1) Easy Mile LogLike many real estate professionals, I am an independent contractor. This means that, if I don’t want to take a major hit at tax time, I have to track every work-related penny I spend so that I can write it off as a deduction. A big factor there is mileage! I keep a little notebook in the center console of my car for tracking my mileage to-and-from the office, but I’m terrible about remembering to write in it. So I’m very intrigued by a new product called Easy Mile Log. In fact, I was hoping that this handy dandy little GPS unit would end up in my Christmas stocking. I was disappointed when it didn’t. Looks like it’s going to have to be my present to myself in the new year. So, what am I going on about? What is Easy Mile Log? I talked to David Winiarczyk, President of Easy Mile Log, to get the skinny. “Everybody knows they’re supposed to keep a mileage log, but nobody does it,” says David. “Easy Mile Log makes it easy to do what you’re supposed to do. “
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How to Prepare Your Business for the End of the Year
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