Real Estate Professionals
Agents and brokers with commission income, investors tracking property-by-property performance, landlords managing rental portfolios.
The Industry
Real estate professionals is a broad category that includes people with very different financial situations. Agents and brokers earn commission income. Nothing gets withheld from those checks, the income arrives unpredictably based on closings, and self-employment taxes take a chunk that surprises many first-year agents. You might close three transactions in March and nothing in April. That irregularity makes tax planning difficult if you don’t have a system in place.
Investors, landlords, and property managers deal with a different set of challenges. Every property is its own profit center with rental income, mortgage payments, repairs, and depreciation to track separately. Short-term rental operators running vacation rentals or Airbnbs face rules that don’t quite fit traditional rental categories. Property managers add another layer by handling funds on behalf of owners. The Treasure Valley’s growth has brought more activity across all these areas, which means more transactions and more complexity.
Who This Covers
Who This Covers
Real estate agents, brokers, property management companies, landlords, real estate investors, and short-term rental operators throughout Nampa, Boise, and the Treasure Valley. Whether you earn commissions or collect rent, the financial picture needs to be accurate.
What Complicates It
What Complicates It
Commission income with no withholding and unpredictable timing. Self-employment taxes that catch new agents off guard. Multiple rental properties requiring separate tracking. The distinction between repairs and capital improvements. Short-term rentals with different tax treatment than long-term leases. Vehicle mileage and home office deductions that require consistent documentation.
What We Handle
For agents and brokers, we track commission income as it comes in and calculate quarterly estimated tax payments based on your actual closings. Business expenses get categorized throughout the year so deductions don’t get missed. Vehicle mileage for showings and client meetings, marketing costs, professional association dues, continuing education, and brokerage fees all add up. The key is tracking them consistently rather than reconstructing everything in March. We set up systems that make this manageable whether you’re closing five transactions a year or fifty.
For investors and landlords, we track income and expenses by property. Each rental address gets its own accounting so you can see which units are actually profitable after mortgage interest, property taxes, insurance, maintenance, and depreciation. Security deposits are recorded as liabilities until applied to rent or returned. When you sell a property, the cost basis and improvement records are already documented. Property managers get support around trust accounting to keep owner funds properly segregated and reported.
Commission Income and Business Expenses
Commission Income and Business Expenses
Tracking income from closings and 1099 statements. Calculating quarterly estimated taxes so April isn’t a surprise. Categorizing vehicle expenses, marketing costs, professional fees, and brokerage splits. Year-round bookkeeping that feeds directly into tax preparation. Business returns prepared by Enrolled Agents who understand commission-based real estate income.
Property-by-Property Tracking
Property-by-Property Tracking
Separate accounting for each rental property showing true performance. Rental income, maintenance costs, property taxes, insurance, and mortgage interest allocated to the correct address. Depreciation schedules maintained and updated. Security deposits handled correctly as liabilities. Schedule E preparation that reflects what each property actually costs and generates.
What Goes Wrong
Agents often treat commission checks like regular paychecks and spend accordingly. The problem is that nothing was withheld. When April arrives, you owe income tax plus self-employment tax on every dollar of net profit. A $100,000 commission year can easily create a $25,000 tax bill. Without quarterly estimates, you might also owe underpayment penalties on top of that. The income variation makes this worse because a strong first quarter might be followed by a slow summer, but the IRS still expects payments based on projected annual earnings. Many agents figure this out the hard way in their first or second year.
Investors mix up repairs and capital improvements constantly. Fixing a broken faucet is a repair and deductible immediately. Replacing all the plumbing is an improvement that needs to be capitalized and depreciated over time. Get this wrong and you either overstate deductions, which creates audit risk, or you miss legitimate write-offs that would lower your taxes. Another common problem is failing to track cost basis properly. When you sell a property, you need records of the original purchase price plus every capital improvement made over the years. Without that documentation, calculating the gain accurately becomes guesswork.
Estimated Tax Problems for Agents
Estimated Tax Problems for Agents
Commission income arrives without any taxes withheld. Irregular closing schedules make income unpredictable throughout the year. First-year agents are shocked by self-employment tax obligations. Quarterly estimates based on last year don’t match this year’s reality. The result is a large April bill, sometimes with penalties.
Property Expense and Basis Issues
Property Expense and Basis Issues
Repairs expensed when they should be capitalized, or improvements depreciated when they should be expensed. Expenses not allocated to specific properties making it impossible to evaluate individual unit performance. Security deposits treated as income in the year received. Poor documentation of cost basis and improvements that creates problems when selling.
What Changes
Agents gain clarity on their actual business costs and tax obligations. Quarterly estimates are calculated based on your real income patterns and updated as closings happen. Deductions are captured systematically throughout the year rather than reconstructed during tax season. Vehicle mileage, marketing expenses, professional fees, and all the other costs of running a real estate business get tracked and categorized. When April arrives, everything is organized and you have a reasonable idea of what to expect. The surprises go away.
Investors see each property as a distinct financial picture. The rental on Garrity generates positive cash flow after all expenses while the duplex on 12th requires more maintenance than the rent covers. Depreciation schedules are current and accurate. Cost basis records are maintained so when you sell, the gain calculation is straightforward. You make portfolio decisions based on actual numbers rather than rough estimates. Tax returns are prepared by someone who understands rental property accounting and captures every deduction you’re entitled to.
For Agents and Brokers
For Agents and Brokers
Business income and expenses tracked throughout the year, not just at tax time. Quarterly estimated taxes calculated to match your actual closings and avoid penalties. Deductions documented so you keep more of what you earn. Tax returns prepared by Enrolled Agents who understand commission income and can represent you before the IRS if questions arise.
For Investors and Landlords
For Investors and Landlords
Property-by-property financial clarity showing which units perform and which ones drag down your portfolio. Accurate depreciation schedules maintained over time. Clean Schedule E reporting that stands up to scrutiny. Cost basis and improvement records ready for eventual sale transactions. The information you need to decide what to buy, sell, or hold in the Treasure Valley market.
The Treasure Valley's Tax and Accounting Team
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