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Real Estate Agents Receive Tax Benefits and Loan Assistance from the Small Business Act of 2010

Recent Legislation Benefits Self-Employed

SBAThe Small Business Jobs Actwas signed by President Obama on September 27, 2010. The legislation provided for tax breaks which included a new health insurance deduction for the 2010 tax year specifically for the self-employed.  In addition, loan provisions for the SBA (Small Business Administration) were extended until December 31, 2010.  Both of these benefits offer real estate agents the opportunity to realize substantial savings and provide financial assistance to an industry hit hard by the recession.

Self Employed Health Insurance Deduction - Up to $3500 in Savings

Self-employed individuals pay 15.3% of their net earnings which is known as the self-employment tax. The self-employment tax rate is the sum of 12.4% for Social Security (old age, survivors, and disability insurance) and 2.9% for Medicare (hospital insurance). The Social Security tax applies to the first $106,800 of net earnings in 2010; there is no ceiling on the Medicare tax.

If an average family (self-employed income) paid $14,000 for health insurance coverage then the 15.3% self-employment tax on earnings used to pay that premium would be $2142. Families with higher earnings and monthly insurance premiums could save as much as $3500. The new legislation (Section 2042) allows the self-employed to deduct this premium on their self-employment tax as well as their income tax. The rationale is that this tax savings can be re-invested in their businesses. For more information regarding this tax benefit go to Health Insurance Tax Break.

Real Estate Brokers and Agents Qualify for SBA Loan Assistance

The Small Business Jobs Act extended loan provisions for reduced closing costs and a 90% loan guarantee.  This provides incentives for both the lender and borrower to take advantage of the programs before year's end.

Real estate agents and Brokers qualify as small businesses and can benefit by refinancing credit card debt and/or obtaining loans through the 7 (a) loan program.  The interest rates for these programs are substantially lower than credit card interest and is tax deductible.  Go to Loan Assistance for more information.

About the Author

Founder and CEO of Virtual Homes Real Estate, a New England based independent residential brokerage firm. The Virtual Homes Real Estate portal provides consumers with an interactive real estate resource offering information and tools making the home buying and selling process easy. Search MLS listings by location with our map based tools. Experience the Future of Real Estate Today!

Comment balloon 1 commentFred Doleac • November 30 2010 04:19PM


Thanks for the great information.  I"m checking with my accountant to make sure we are included in the changes.

Posted by Kay Van Kampen, Realtor®, Springfield Mo Real Estate (RE/MAX Broker, RE/MAX) almost 10 years ago