Last year 100s of people signed on with one of Chicago’s rental services to begin what they were led to believe might be a lucrative career in real estate. A few of them earned a decent buck during the prime rental season, but most didn’t, and the great majority of them left the business within a few months.
The rental services treat their leasing agents as independent contractors, and should have recently sent them an IRS Form 1099 if they earned more than $600. Independent contractor leasing agents are required to pay self-employment taxes at a 15.3% rate, e.g. $612 on $4,000 of commission income, in addition to any income tax that may be due.
That may come as a shock to some of the folks who were naïve enough to sign on with a rental service a/k/a locator a/k/a finder. Last year at this time we suggested that there might be ways for the former leasing agents to cut their losses and possibly even reap a big reward.