When selling real estate, most Agents aren’t Employees but “Independent Contractors”. As an Independent Contractor, it is important that you save part of your commission for the taxes you will inevitably have to pay. As with anything financial, it’s important that you talk with an Accountant to discuss the specifics of your situation.
That being said, here are some general guidelines to follow:
- Save 20% of All Gross Commission
- Put That 20% In A Bank Account You Don’t Have Easy Access To
- Don’t Touch It (Or Even Invest It) Until It’s Time To Pay The Tax Man