When it comes to business structure, realtors and LLCs go hand in hand — at least, that’s what everyone seems to recommend. But what if following that common advice is quietly draining your profits and limiting your options?

The Tax Trap of Realtors and LLCs

Here’s what most agents don’t realize: LLC income is hit with self-employment tax on every dollar profit. That means for many realtors, a big slice of commission income is lost before it even hits your bank account. What nobody tells you is that there are smarter structures out there — and sticking with the LLC might be costing you thousands in unnecessary taxes.

Missed Opportunities for Realtors and LLCs

It’s not just about taxes. When you lock yourself into an LLC, you also lock yourself out of powerful retirement and investment strategies. With a different structure, like an S Corporation, you could roll over old 401(k)s or IRAs, become your own plan administrator, and borrow up to $100,000 (per couple) to fund real estate investments. Most agents don’t even know this is possible — because they’ve been told “LLC” is the only path.

Why You Should Reconsider Realtors and LLCs

So here’s the big question: if you’ve been told to form an LLC, have you ever stopped to ask why not something else? Why not choose a structure that saves you money and gives you flexibility instead of boxing you in?

The truth is, the “default” choice of LLC might not be the best choice for you. For realtors and LLCs, the conversation is overdue for a rethink.

Want to find out what structure could really benefit your business? Connect with James D. Miller, CPA at jdmcpa4u.com.