New New RE agent tax question need some feedback for a friend ;)

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New New RE agent tax question need some feedback for a friend ;)

JDee Moore
Specialist · Tulare, CA · Member since 2014 · 71 posts · 48 votes

Hypothetically, if someone is signing their eXp realty contract as a new RE agent would anybody share a story why would "one" use a EIN number versus a SS number when filling out the W9?


NOTE: If that "someone" just received their EIN number a month ago and haven't used it on any business related documents and do not have any employees nor have filed a LLC but like to take advantage of the benefit of doing business under an EIN, is this a common move for RE agents?

Thanks in advance.

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Charlie CameronBusiness Member
Investor · Niceville, FL · Member since 2017 · 450 posts · 366 votes
5y

@JDee Moore it sort of depends on how much you make. Sorta. I'M NOT A CPA so let's get that out there. But my CPA suggested that since my business is starting to pick up to file my agent LLC (which will then elect to be taxed as an S Corp) for 2021. This is all for tax purposes rather than liability (we get E&O coverage already for that). Should reduce self employment taxes and will eventually be beneficial for other reasons like healthcare (not an issue for me yet). You can switch from SSN to EIN later.

Another note, make sure your filed business follows state requirements for naming convention and entity type. There are specific requirements per state for filing your agent business.  

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  • Charlie CameronBusiness Member
    Investor · Niceville, FL · Member since 2017 · 450 posts · 366 votes
    5y

    @JDee Moore it sort of depends on how much you make. Sorta. I'M NOT A CPA so let's get that out there. But my CPA suggested that since my business is starting to pick up to file my agent LLC (which will then elect to be taxed as an S Corp) for 2021. This is all for tax purposes rather than liability (we get E&O coverage already for that). Should reduce self employment taxes and will eventually be beneficial for other reasons like healthcare (not an issue for me yet). You can switch from SSN to EIN later.

    Another note, make sure your filed business follows state requirements for naming convention and entity type. There are specific requirements per state for filing your agent business.  

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  • JDee Moore
    OP
    Specialist · Tulare, CA · Member since 2014 · 71 posts · 48 votes
    5y

    @Charlie Cameron

    Awesome exactly what “my friend” needed to hear. Thanks again.

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  • Basit SiddiqiBusiness Member
    Accountant · New York, NY · Member since 2015 · 8k+ posts · 3k+ votes
    5y

    handing over an EIN may be better than handing over a SSN as a SSN is very sensitive information.

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  • Russell BrazilBusiness Member
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    Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes
    5y

    Not all states allow comissions to be paid to an llc. 

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