The Complete Tax Deductions Checklist for Real Estate Agents

Just as performing more transactions can increase your income, understanding how to apply your tax deductions as a real estate agent can significantly improve your bottom line.

Agents can claim numerous deductions, including mileage at 67 cents per mile for 2024, home office expenses, and marketing costs. Knowing what deductions you’re entitled to can substantially reduce your taxable income, leaving more money in your pocket.

To help make tax time a little easier, we compiled over 75 of the top deductions real estate agents can use. It’s a good idea to familiarize yourself with this list so you can track your deductible expenses. 

Note: the following is not tax advice and should be considered for educational purposes only. Consider consulting with a qualified tax professional to ensure you’re compliant with tax laws.

Your Tax Status as a Real Estate Agent

First, it’s beneficial to understand how your filing status affects which deductions you can take.

Your tax status plays an essential role in determining your tax obligations and deductions. Most agents are classified as independent contractors rather than employees.

Independent contractors have more control over their work and schedule. You decide when and how to perform your duties, often using your own tools and resources.

This status affects your taxes in several ways:

• You’re responsible for paying self-employment taxes.
• You must make quarterly estimated tax payments.
• You can deduct more business expenses.

As an independent contractor, you receive a 1099-NEC form instead of a W-2. That means no taxes get withheld from your income.

You need to pay self-employment tax, which covers Social Security and Medicare. The good news is you can deduct half of this tax on your return.

Keep detailed records of your income and expenses. Proper recordkeeping can help you maximize deductions and accurately report your earnings.

Remember, your specific situation may vary. Consulting a tax professional is always wise and can ensure you comply with all relevant tax laws and regulations.

Real Estate Agent Tax Deduction Checklist (Free Download)

To help you stay organized and benefit from your potential deductions, we created a comprehensive checklist.

Here’s a list of common tax deductions you should consider, along with some you may not have thought of:

1. Home office rent or pro rata mortgage interest 
2. Internet used for your home office 
3. Home office utilities (electricity, water, gas) 
4. Depreciation of your home office space 
5. Office furniture (desks, chairs, etc.) 
6. Office equipment (computers, printers, monitors) 
7. Office supplies (pens, paper, toner) 
8. Office decoration (plants, pictures, etc.)
9. Cleaning services for your work area
10. Pest control treatment for your home office space 
11. Mobile phone and service plan used for business 
12. Landline expenses, if used exclusively for work 
13. Vehicle mileage driven for business purposes 
14. Vehicle insurance for work-related use 
15. Car maintenance and repairs linked to your business 
16. Parking fees for client meetings or showings 
17. Tolls incurred during business travel 
18. Vehicle loan interest (for business use) 
19. Cost of wraps or decals for vehicle branding 
20. Marketing on social media platforms 
21. Online advertising for property listings 
22. Flyers, postcards, and brochures 
23. Custom business cards 
24. Professional photography for property listings 
25. Drone videography for showings 
26. Website creation and hosting expenses 
27. Fees for maintaining a customer relationship management (CRM) program 
28. Lead generation subscription services 
29. Search engine optimization (SEO) services for your website 
30. Property staging expenses for showings 
31. Signage for open houses and listings 
32. Subscription costs for market analysis tools 
33. Real estate license renewal fees 
34. Professional association dues (e.g., local realtor boards) 
35. Continuing education to maintain your license 
36. Workshop or seminar entry fees 
37. Travel for conferences (airfare, lodging, etc.) 
38. Business-related meals (50% deductible) 
39. Costs of hosting client parties/events 
40. Gifts to clients (note that there may be annual limits) 
41. Custom-branded promotional products 
42. Errors and omissions (E&O) insurance premiums 
43. General liability insurance for your business 
44. Legal fees for contracts and consultations 
45. Tax preparation or CPA services 
46. Financial advisor or consultancy costs 
47. Referral fees paid to other agents 
48. Bank fees on business accounts
49. Credit card interest payments (for business purchases)
50. Work attire featuring your company logo 
51. Dry cleaning of work-related branded clothing 
52. Rental costs for office spaces or co-working desks 
53. Software licenses for business applications 
54. Cloud storage for business files 
55. Video conferencing subscriptions 
56. Maintenance services for office equipment 
57. Postage for sending client documents 
58. Courier services for urgent deliveries 
59. Printing of property brochures or banners
60. Personal assistant expenses (used for your business) 
61. Virtual assistant expenses 
62. Standard subscriptions (e.g., real estate industry magazines) 
63. Assistant or employee salaries (if applicable) 
64. Health insurance premiums 
65. Contributions to retirement accounts 
66. Workers’ compensation insurance 
67. Payroll service costs 
68. Repairs or upgrades to business technology 
69. Fees for background or credit checks for tenants 
70. Costs of sponsoring local events for promotion 
71. Rental fees for specialty tools (e.g., drones) 
72. File storage charges or document archiving services 
73. Fees for answering services 
74. Costs for rented staging materials 
75. Moving costs for office relocation 
76. Small appreciation gifts for suppliers or colleagues 
77. Open house hosting costs (light refreshments, etc.) 
78. Expenses for gaining additional certifications or designations 

Remember to keep detailed records and receipts for all your expenses. That can help substantiate your deductions if the IRS ever audits you.

You can download our free tax deduction checklist to ensure you don’t miss out on any expenses during the year. You can customize it to help you stay organized and maximize your deductions at tax time.

How to File Your Taxes as a Real Estate Agent

As a real estate agent, you’re usually considered self-employed for tax purposes. As a result, you need to file your taxes differently than traditional employees.

You’ll use Form 1040 to report your income and pay taxes. This form is the standard individual income tax return used by most taxpayers.

In addition to Form 1040, you need to complete Schedule C. This form is used to report your business income and expenses. It’s crucial for calculating your net profit or loss from your real estate activities.

Keep detailed records of all your income and expenses throughout the year. That includes commissions, fees, and any other money earned from your real estate work.

Track your business expenses carefully, including:

• Mileage (67 cents per mile for 2024)
• Marketing costs
• Office supplies
• Continuing education

You also need to pay estimated taxes quarterly as a self-employed individual. The due dates are typically:

• April 15
• June 15
• September 15
• January 15 of the following year

Consider using accounting software or hiring a tax professional to help manage your finances and file taxes accurately. These options can save you time and potentially reduce your tax liability.

Common Tax Planning Mistakes to Avoid

If you file your own taxes, be aware of a few costly errors that real estate agents often make.  Here are some pitfalls you want to avoid:

• Combining personal and business expenses: Keep your finances separate. Use dedicated credit cards and bank accounts for your real estate activities.
• Poor recordkeeping: Maintain detailed documentation of all your business expenses. Organize receipts, invoices, and mileage logs throughout the year.
• Missing out on deductions: Familiarize yourself with eligible tax deductions for real estate agents. These may include marketing costs, home office expenses, office supplies, license renewal fees, and continuing education.
• Exaggerating expense claims: While you want to claim all legitimate deductions, inflating your expenses can raise red flags with the IRS. Be honest and accurate in your reporting.
• Neglecting estimated tax payments: As an independent contractor, you’re responsible for paying taxes quarterly. Failing to do so can result in penalties.

Ignoring tax code changes: Stay informed about updates to tax laws that may affect your filing. Consider consulting with a tax professional who specializes in real estate.