Realtor accountant in Ottawa

Ottawa’s market has a rhythm, and tax does not follow it

A market shaped by government relocation cycles and posting seasons produces income that clusters rather than arrives smoothly. Instalments calculated from last year’s total take no account of when this year’s money actually shows up, which is how a strong spring turns into a cash problem in a quiet quarter. We set instalments against the real pattern and revisit them when the pattern changes.

Gross commission is not your income

The deposit that reaches you is after the brokerage split, and before desk fees, marketing, vehicle costs, licensing and everything else. The taxable figure sits somewhere else entirely. Realtors who plan from the deposit consistently under-reserve for tax, and the shortfall appears at exactly the wrong moment. Keeping expenses current through the year, rather than assembling them in April, is what makes the number trustworthy.

Whether a PREC is worth it

A personal real estate corporation changes where commission lands: income is earned by the corporation and paid out deliberately, which opens the salary-versus-dividend decision and the option of leaving profit in the company. It also adds a corporate return, formal bookkeeping and real record-keeping obligations.

Whether it pays turns far more on how much you draw than on what you gross. If you spend essentially everything you earn, the deferral advantage narrows quickly. We run it on your actual drawings — our salary-versus-dividends calculator is a reasonable starting point.

The shareholder loan trap that catches newly incorporated realtors

Once incorporated, the business account is not your account. Money taken out that was never declared as salary or a dividend is a shareholder loan, and a loan left outstanding past the deadline gets included in your personal income — often in a year you were not expecting it. Realtors are unusually exposed here because commission timing encourages ad-hoc draws. A regular scheduled draw solves most of it. Our shareholder loans guide covers the mechanics.

Expenses: what holds up and what does not

Vehicle costs, home office, marketing, licensing, dues and technology are all ordinarily deductible to the extent they are incurred to earn commission. The two recurring failures are opposite: claiming a vehicle without the mileage records to support the business-use share, and abandoning a home-office claim that is genuinely defensible. Both are solved by deciding the position up front and keeping the records as you go rather than reconstructing them.

Your first year incorporated, month by month

The first year through a personal real estate corporation is where most of the surprises live, because the money now takes a different route. Commission is earned by the corporation rather than by you, and it does not become your personal income until you deliberately pay it out.

The rhythm that works is unglamorous. Keep the corporate account genuinely separate from personal spending. Set a regular draw instead of taking money as deals close. Decide the salary-and-dividend mix early in the year rather than reconstructing it the following April, and revisit it if the year turns out very different from the plan. Keep the mileage log from day one, because it is the claim most often lost. And expect the first corporate year-end to ask for more documentation than a personal return ever did — that is normal, and it is a one-time adjustment rather than a permanent burden.

Owners who set this up properly in year one rarely think about it again. Owners who do not tend to spend year two untangling it.

Working with us from Ottawa

Everything runs online — video, phone, secure upload and e-signature. Booking shows Eastern times automatically, so there is nothing to convert. The fee is fixed and agreed before work begins, which is what makes a question about a deal structure in August worth asking at the time rather than at year-end.

Coordinating the corporate and personal returns

Once a PREC exists there are two returns rather than one, and they are not independent. What the corporation pays out determines what appears on your personal return, and the mix chosen in December decides the personal tax bill the following April. Preparing them separately, or worse with different people, is how realtors end up with a corporate plan that made sense in isolation and a personal bill nobody modelled. We prepare both together and decide the split against the combined outcome rather than optimising one side.

What EverStone handles for you

One CPA, one fixed fee agreed up front:

• Corporate return and year-end statements for your PREC
• Personal T1 coordinated with the corporate return
• Instalments planned against real commission timing
• Vehicle, home office and marketing claims properly supported
• HST registration and filings
• Shareholder loan balances watched before they become income

Fixed fees, fully online

EverStone is an Abbotsford CPA firm working with Ottawa realtors entirely online. Booking shows Eastern times automatically, and anything sent at the end of your day is usually answered before the next one starts. The fee is fixed and agreed before work begins. See what it costs.