As a self-employed real estate agent, you’re not just selling homes, you’re running a business. And, as a business owner, you can significantly lower your taxable income by tracking and claiming real business expenses. Understanding what qualifies as a write-off can potentially help you save money each year.
Here are 15 legitimate tax deductions every real estate agent should be tracking. The corresponding real-world examples demonstrate that taxpayers could take nearly $20,000 in deductions for the year.
Real estate agent tax write-offs
1. Vehicle and mileage expenses
Whether you’re driving to showings, open houses, or client meetings, your vehicle is a major business tool. There are two options for claiming this deduction, the standard mileage rate or actual expenses.
Example: Using the simpler and safer standard mileage rate, say you drove 12,000 miles for business. Using the IRS standard mileage rate ($0.70 per mile in 2025), you could deduct $8,400 plus business related parking and tolls.
You can also consider deducting the business use portion of your actual vehicle costs, including depreciation, gas and oil, repairs, insurance, car washes, and more.
2. Home office deduction
If you use part of your home exclusively and regularly for your real estate business, you can claim the home office deduction using one of two methods. Be diligent about keeping good records, such as utilities bills, rent or mortgage payments, and insurance for the entire house when deducting actual home office expenses. To help avoid questions from the IRS, include depreciation of your personal home.
Example: You have a 150-square-foot room used solely for work in a 1,500-square-foot home. That’s 10% of your home expenses. If your rent or mortgage is $1,500 per month, you can deduct 10% of all allocatable expenses.
A safer consideration is using the “Simplified” method, which limits the maximum allowable square footage to 300 feet times the standard rate of $5 which generates up to a $1,500 deduction.
Though the “Regular” method generates a higher deduction, it often causes more attention from the IRS as well as taints part of your personal home as a business asset, which can impact the personal residence exclusion on sale.
3. Marketing and advertising
From online ads and social media promotions to flyers, business cards and signage, marketing costs are fully deductible.
Example: You spent $500 on Facebook ads, $300 on professional listing photos, $100 on business cards, and $200 on branded yard signs. That’s $1,100 in deductible marketing expenses.
4. Continuing education, training, and professional development
Courses, certifications, seminars, webinars, and industry conferences that help improve your skills or stay in compliance are tax deductible.
Example: You attended a $250 real estate marketing workshop and paid $100 for a continuing education course. Total deduction: $350.
5. Licensing and membership fees
Annual license renewals, MLS fees, and dues for professional organizations are tax deductible.
Example: You paid $150 for your annual license renewal, $400 for MLS access, and $120 for NAR membership. That’s another $670 in deductions.
6. Client gifts
You can deduct up to $25 per client per year for gifts.
Example: You gave a $25 bottle of wine to 10 clients after closing. That’s $250 in deductible gifts.
Tax Tip: If a $100 gift basket was presented for a family of four, that still qualifies for the deductible limit.
7. Office supplies and equipment
Pens, paper, printer ink, folders, and other everyday office supplies are deductible.
Example: You spent $75 on printer ink, $50 on paper, and $25 on folders and pens. Total deduction: $150.
Tax Tip: Equipment like an iPad, laptop, cell phone, or printer, costing under $2,500 per item, can be expensed in the year of purchase based on business use, versus depreciating them over multiple years (five years for equipment and seven years for furniture).
8. Technology and software
Your CRM system, email marketing tools, scheduling apps, and even your laptop or smartphone can be deducted.
Example: You pay $30 per month for a CRM ($360 per year), $15 per month for email marketing ($180 per year), and $610 for unlimited, yearly Teams and Zoom. Deductible amount: $1,150.
9. Internet and telephone bills
If you use your phone and internet for business, you can deduct a usage percentage of these bills. Similar to home office expenses, be sure to keep detailed records to avoid scrutiny.
Example: Your phone bill is $100 per month, and internet is $80 per month. If 70% of usage is for business, you can deduct $126 per month or $1,512 per year.
10. Professional services
Hiring a bookkeeper, accountant, tax or legal advisor to help with your business? Their fees that are allocatable to your business are legitimate business expenses.
Example: You paid $600 for legal and tax preparation, $100 for notary services and $300 for bookkeeping. Total deduction: $1,000.
11. Staging and property prep
Expenses related to staging homes, including furniture rental, décor, and cleaning services, are deductible.
Example: You spent $400 on furniture rental, $150 on décor, and $100 on cleaning for a listing. Deductible amount: $650.
12. Travel and meals
If you travel for business, like going to a real estate seminar or meeting clients, you can deduct some costs. You can deduct your airfare, lodging, and half of your meal costs.
Example: You flew to a conference ($300), stayed two nights in a hotel ($250), and spent $100 on meals. Deductible amount: $600.
13. Insurance
Business-related insurance premiums, such as Errors and Omissions (E&O) insurance, general liability, and even a portion of your home insurance (if you claim a home office), are deductible.
Example: You paid $800 for E&O insurance and $100 per month for home insurance. If you use 10% of your home for business, you can deduct $120 from your total $1,200 for home insurance. Total: $920.
14. Depreciation
You can depreciate larger cost items like computers, office furniture, and your car if you buy it for business use.
Example: You bought a $2,800 desk and chair set for your business office as well as a $4,000 computer. You are allowed to depreciate the furniture over seven years and the computer over five years which amounts to a deduction of $400 per year for the furniture and $800 per year for the computer. Total: $1,200.
15. Bank fees and interest
Fees for business bank accounts, credit card processing, and interest on business loans or credit cards are deductible.
Example: You paid $120 in bank fees and $300 in credit card interest for business purchases. Total deduction: $420.
Tips for staying organized
Tracking multiple deductions can get overwhelming without the proper organization. Here are some of the tools you might consider:
- Use accounting software: Tools like QuickBooks or FreshBooks can automate expense tracking and generate reports.
- Keep digital receipts: Scan or photograph receipts and store them in cloud folders by category.
- Track expenses in real time: Don’t wait until tax season. Log expenses weekly or monthly.
Tax planning strategies
Tracking expenses is just one part of smart tax management. Here are some proactive strategies to help you plan ahead and reduce your tax burden:
Separate business and personal finances
Open a dedicated business checking account and credit card. This simplifies tracking and ensures you don’t miss deductible expenses. This is critically important for supporting your deductions, as well as your tax filings.
Pay quarterly estimated taxes
Real estate agents often don’t have taxes withheld from commissions. Avoid penalties by paying quarterly estimated taxes to the IRS based on your projected income to both the IRS and your state of residence, if applicable.
Tax Tip: Setting aside 30% to 35% of your expected net income for these payments is a good starting point, though we recommend getting tax advice.
Consider using an S-Corporation election
If your net income after expenses reaches or exceeds $75,000, electing to switch from a sole proprietorship using Schedule C of Form 1040 to an S-Corporation using 1120-S, can reduce self-employment taxes as well as offer other benefits. This strategy requires careful planning and professional guidance.
Note that since business expenses are deducted using Schedule C, a Partnership Form 1065, S-Corp return Form 1120-S, or C-Corp return Form 1120, they are in addition to using itemized or standard deductions.
Maximize retirement contributions
Your net income from your business allows you to contribute to a SEP IRA or Solo 401(k), or even a traditional IRA, to help reduce taxable income while saving for your retirement.
Deduct self-employed insurance expenses
Self-employed insurance expenses for you and your family, including most payments of health, dental, vision, and long-term care premiums can help lower your income tax. Deductible amounts are based on your net income.
Tax Tip: Medicare Parts B and D can qualify for this adjustment.
Plan for big purchases
Timing matters. If you plan to buy a new laptop or invest in marketing, do it before the year ends. This can help increase your deductions for that tax year.
Keep a tax calendar
Mark important dates like quarterly tax deadlines, license renewals, and annual filing dates. Staying ahead prevents last-minute stress and missed opportunities.
Consult with trusted professionals
Tax laws change frequently, such as with the new tax law (OBBBA). A financial advisor and CPA who understands real estate can help you with tax planning and preparation.
Moving forward
Staying on top of your tax deductions isn’t just about saving money. It’s also about running your real estate business with confidence and clarity.
You can lower your tax burden by tracking your real estate agent write-offs for taxes. This can also free up resources to reinvest in your growth. The key is consistency: keep good records, stay informed, and work with a professional who understands your industry. With the right approach, tax season can become a powerful tool and not a dreaded chore.
At Mercer Advisors, we offer specialized services for real estate agents. We also provide integrated solutions for connecting your financial life, including financial planning, investment management, tax, estate, insurance, and more. This approach allows you to focus on your personal and professional passions while working toward Economic Freedom™.
If you’re interested in becoming a real estate agent, contact your Mercer Advisors wealth advisor to discuss tax planning strategies and wealth management, as well as financial planning for real estate agents and their families.
Already a real estate agent and not a Mercer Advisors client? Want to know more about tax deductions and building wealth? Let’s talk.
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