Tax Deductions for Real Estate Agents and Brokers
As a real estate agent or broker, under federal guidelines, you are considered a self-employed sole proprietor, even if you're an agent or broker working for a real estate brokerage firm. That status allows you to deduct many of your expenses on your tax return. Detailed record keeping and knowing what you can write off are key to maximizing your tax deductions.
What’s deductible?
In your business, you drive, a lot! All that mileage, gas, electric (for EVs), auto insurance, parking, tolls, new car purchases, lease costs, and vehicle upkeep are deductible. Tip: Use an app to help you track mileage and expenses while on the go.
Additionally, common deductions include:
- Marketing and advertising expenses, such as sales and open house signs and flyers, your website development and maintenance, business cards, and mailers.
- Coaching, training, and education costs.
- Licensing and renewal fees.
- Association dues, multiple listing service (MLS) dues, and brokerage desk fees.
- Travel airfare, lodging, and meals for real estate education and business purposes,
- Home office expenses, whether you rent or own your home,
- Gifts ($25 deduction limit per client per year), entertainment, and other costs for clients.
- Commissions paid to other agents or employees that work for or “under” you are generally fully deductible.
- Legal and professional services, like tax preparation fees, may be deducted if they are necessary for operations.
- Charitable deductions may be claimed on our personal tax return if you itemize.
- A portion of your self-employment tax regardless of whether you itemize or take the standard deduction.
- Office expenses, like printing and postage, are also deductible.
- State and local income taxes might also be deducted, with the maximum being $10,000.
- Self-employed health insurance premiums you pay for yourself and your family may be deductible.
Remember, to claim any of these deductions they must be ordinary, necessary, and directly related to your business, Oh, and they must be a reasonable amount.
Filing taxes is time-consuming and confusing. Avoid the hassles and work with our experienced tax team to help you file your tax return and provide tax planning services all year long.