Congratulations! You took the necessary actions to create an LLC. All that effort is done, so what should you do next?
First, you’ll likely need to transfer your real estate license into your newly created entity. This requirement and process is different in every locality. We’ve probably already helped one of your colleagues with this so we can advise you. Or you can check with someone in your office who has already done it.
Second, you’ll need to redo the contract or agreement with your brokerage firm from you personally to your new entity. Your brokerage firm will now pay the Employer Identification Number (EIN) of your LLC instead of your Social Security Number. Again, someone in your office has already done this and knows what to do.
Finally, you’ll want to open a business checking account and obtain a credit card in the name of the LLC. The revenue paid from your brokerage firm will now go into your business checking account. Business expenses will be charged to the business credit card and paid off monthly from funds in the business checking account. We suggest you use a business credit card and not a personal credit card because the business cards generally have better year-end spending summaries, which will be needed to help prepare your S-Corp tax return.
The most common expense incurred which should not be paid for with a business card is fuel for your vehicle. In most situations, it is better to reimburse yourself for business mileage on your personal vehicle rather than to buy the vehicle in the business name and deduct the expenses. Call us before you buy that new vehicle, and we will tell you which method is best.
We have fine-tuned a process to help you simplify operating your LLC, which will allow you more time to canvass for new clients and opportunities. Tell us your process and we may be able to help you streamline it.
