Every deduction a real estate agent forgets
Tick what applies, put in your numbers, and see what it is actually worth. Because you are self-employed, a deduction saves you far more than your income-tax bracket suggests.
Marginal, not effective.
Zero in FL, TX, TN, WA, NV and others.
Confirm the current year's IRS rate.
Showings, closings, previews, open houses.
Combined marginal rate 40.2% — 22% federal + 5% state + 13.2% self-employment, after the half-SE deduction.
Vehicle & travel
$10,020Dues, licences & insurance
$2,025Brokerage & transaction
$8,850Marketing & lead generation
$13,500Technology & office
$5,550Professional & education
$10,750This is an estimate, not tax advice. Self-employment tax applies only up to the annual Social Security wage base, above which the rate drops to the Medicare portion — so a very high earner’s true saving is lower than the figure above. Deductibility depends on facts this page cannot see. Give the list to your CPA; do not file from it.
Why a deduction is worth more to you than to an employee
This is the part almost every “realtor write-offs” list leaves out, and it is the part with money in it. A W-2 employee in the 22% bracket saves 22 cents per dollar of deduction. You are not that person.
As a 1099 agent you pay self-employment tax — the employer and employee halves of Social Security and Medicare, 15.3% combined — on your net business income. A business deduction reduces that net, so it cuts your SE tax as well as your income tax. Then your state takes its cut of the same reduced number.
combined marginal rate = federal bracket
+ state rate
+ self-employment tax (15.3%, less its own deduction)
saving = deduction × combined marginal rateThere is one wrinkle the calculator handles and most articles do not: half of your SE tax is itself deductible against income tax, so the effective SE component is slightly under 15.3% rather than the flat number bolted on top. Even after that adjustment, a 22%-bracket agent in a 5% state is typically saving around 39 cents on the dollar, not 22. That is nearly double, and it changes which purchases are worth making before December 31st.
The three that get missed most
Mileage. Not the drive to your office — that is commuting — but every showing, preview, inspection, closing, open house and supply run. Agents routinely under-count by thousands of miles because they never logged them, and at current rates every 1,000 miles is roughly $700 of deduction. A contemporaneous log is what makes it defensible.
The portion of things you already pay for. Phone, internet, and a room in your house are not new expenses, so they never feel like deductions. The business share of each one is.
Fees deducted before you ever see the money. Brokerage splits, transaction fees, desk fees, franchise royalties and E&O premiums are often withheld from your commission at closing, so they never appear as a payment you made. Check whether your 1099 reports gross or net commission — if it reports gross, those fees are yours to deduct, and if you never see an invoice you will not remember to.
Common questions
What can a real estate agent write off on taxes?
Ordinary and necessary business expenses: vehicle mileage, MLS and association dues, licence renewal, errors and omissions insurance, brokerage and transaction fees, marketing and advertising, signage and photography, lead generation, CRM and software subscriptions, a home office, the business share of phone and internet, continuing education and coaching, client gifts, staging, and business travel. Client meals are generally limited to 50%.
Can a realtor deduct mileage or actual vehicle expenses?
Either, but not both, and the choice has consequences. The standard mileage rate multiplies business miles by the IRS rate for that year and requires only a mileage log. The actual-expense method deducts the business percentage of fuel, insurance, repairs and depreciation, and requires receipts for all of it. If the actual method is used in the first year a vehicle is placed in service, you generally cannot switch to standard mileage for that vehicle later.
Is the home office deduction worth taking for a real estate agent?
Usually yes, and the old fear about it triggering an audit is not a good reason to skip a deduction you qualify for. The requirement is regular and exclusive business use — a desk used only for work qualifies, a kitchen table does not. The simplified method uses a fixed rate per square foot up to 300 square feet, which keeps both the arithmetic and the recordkeeping small.
How much can a real estate agent deduct for client gifts?
Business gifts are limited to $25 per recipient per year, a limit set decades ago and never indexed, which is why a $200 closing gift is mostly not deductible. Incidental costs such as engraving, packaging and shipping generally do not count against the $25. Branded promotional items under a small per-item cost are generally treated as advertising rather than gifts, which is a different and more generous category.
Do real estate agents need to pay quarterly estimated taxes?
Almost certainly. Nobody withholds tax from a commission cheque, so a 1099 agent generally owes estimated payments four times a year and faces an underpayment penalty for missing them. The combined marginal rate this page calculates is a reasonable starting point for what to set aside from each closing — before the money reaches your current account, not after.
Most of this list is spend you already have a record of
Brokerage fees, marketing spend, lead-gen invoices and closing dates all live somewhere in the business you already run. The reason the list is hard is that they live in five places. RealTeaCRM keeps deals, spend and closings in one system, with every outbound message waiting on your approval.
Start freeEducational only. Not tax advice — confirm everything with a CPA. To see what each closing is worth before deductions, use the commission split calculator.