The tax deadline is looming and you don’t have the funds to pay what you owe. How do you handle it? If you have a real estate commission coming to you, a cash advance could be the solution. Realserve – the commission advance company for real estate professionals – provides real estate agents with the fast cash they need to settle debts with the Canada Revenue Agency (CRA).
“Nobody wants to owe CRA and if they do they probably want to get it taken care of right away,” says Leanne Lowe, Realserve’s west coast office manager. “If they have a firm sale, it would probably be in their best interest to avoid tax fees and penalties.” Although self-employed individuals have until June 15, 2018 to file their returns without incurring penalties, any balance owing is due by April 30, 2018.
Some real estate professionals set aside money throughout the year with taxes in mind. Others opt to retain their commissions and settle their burden at tax time. “It’s basically their choice if they want to take deductions out of their commission and some opt not to,” says Lowe. “They decide to deal with it later on.” In this case, they might not have the necessary funds to pay, and their debt to CRA may build as the years go by.
Debt can also accumulate for those who choose to pay off CRA through borrowing from credit lines. Realserve, on the other hand, allows real estate agents to borrow against an upcoming commission, so interest is automatically settled when the commission comes in. “When their office pays us out their debt is paid in full and they don’t have to worry about it anymore,” Lowe says.
“If they have a firm sale and want to pay off Revenue Canada it’s an easy process,” Lowe says. “A cash advance alleviates the stress of CRA breathing down your neck.” Realserve offers same-day direct deposit with no administration fees.
Contact Realserve to discuss whether a cash advance on your commission at tax time makes sense for your unique situation.
Using commission advance fees as a deductible expense
The cost associated with a commission advance from Realserve is a deductible business expense. All Realserve clients receive year-end tax receipts for the amount of interest they’ve paid. “If you’re using these funds to promote your business, it is tax deductible,” Lowe points out. Consult with your accounting professional to be sure you make the most of any available deductions.