Real estate agent tax deductions checklist

Real estate agent tax deductions are not hard to list. Every page that ranks for the phrase has the same fifteen items. What decides whether an agent actually gets them is the record behind each one: the commission statement that proves the split, the mileage log written the week of the showing, the receipt that shows a closing gift cost $25 and not $60. This checklist is written from the bookkeeping side. For each deduction it gives what qualifies, the record that holds up, and the Schedule C line it lands on.

It describes how the deductions work, not what to claim. Your tax preparer decides what goes on your return.

Who this applies to

The IRS treats a licensed real estate agent as self-employed for all federal tax purposes when substantially all of their pay is tied to sales or other output rather than hours, and their services are performed under a written contract saying they will not be treated as an employee (IRC §3508, summarized on the IRS page for licensed real estate agents). Most agents meet both tests and operate as sole proprietors, so their business income and expenses go on Schedule C (Form 1040) and their net profit is subject to self-employment tax.

An agent who has formed a single-member LLC is still on Schedule C unless the LLC elected to be taxed as a corporation. An agent whose LLC is taxed as an S corporation files Form 1120-S for the business, takes a salary through payroll, and gets reimbursed for many of the costs below through the company instead. The deductions are the same costs; where they are claimed is different.

The checklist: deduction, record, Schedule C line

Deduction	What qualifies	The record that holds up	Schedule C line
Brokerage split	The broker’s share of a commission you reported in full	Commission disbursement statement for each closing	10, Commissions and fees
Desk, transaction and franchise fees	Monthly desk fees, per-closing transaction fees, franchise royalties	Brokerage statements	10, Commissions and fees, or 27a
Referral fees paid	Fees you pay another agent or a lead service at closing	Disbursement statement, referral agreement	10, Commissions and fees
MLS and association dues	MLS, local board, state and national association dues	Invoices, card statements	27a, Other expenses
License renewal and fees	State license renewal, fingerprinting, exam fees once licensed	State receipt	23, Taxes and licenses
E&O and liability insurance	Errors and omissions, general liability	Policy declarations page, payment record	15, Insurance
Marketing	Signs, photography, staging you pay for, flyers, websites, ads, mailers	Invoices with the listing or campaign named	8, Advertising
Vehicle	Business miles at the standard rate, or the business share of actual costs	Mileage log, kept as you drive	9, Car and truck expenses
Parking and tolls	Business trips only, on top of the standard rate	Receipts or toll statements	9, Car and truck expenses
Phone and internet	The business share of the bill	Bill, plus how the share was worked out	25, Utilities, or 27a
Software and subscriptions	CRM, transaction management, e-signature, lockbox subscriptions	Invoices	18, Office expense, or 27a
Contract labor	Transaction coordinators, assistants paid as contractors, photographers	Invoice, W-9, and a 1099-NEC where required	11, Contract labor
Continuing education	Courses that maintain or improve your skills as an agent	Course receipt	27a, Other expenses
Business meals	50% of a meal with a client or prospect where business is discussed	Receipt, plus who attended and the business purpose	24b, Deductible meals
Client gifts	Up to $25 per recipient per year	Receipt and the recipient’s name	27a, Other expenses
Travel	Conferences and trips away from home overnight for business	Receipts, agenda	24a, Travel
Home office	A space used regularly and exclusively for the business	Floor plan or measurements, and the expense records	30, via Form 8829 or the simplified method
Equipment	Laptops, cameras, drones, furniture used in the business	Purchase receipt, date placed in service	13, Depreciation (Form 4562)

A few costs agents pay are not on Schedule C at all. Self-employed health insurance premiums (IRC §162(l)), contributions to a SEP-IRA or solo 401(k), and the deductible half of self-employment tax (IRC §164(f)) are adjustments on Schedule 1. They still need records, and they still reduce tax, but they do not reduce Schedule C profit.

Brokerage splits only count if you reported the gross

The split is usually the largest deduction an agent has, and the one that goes wrong most often in the books. A commission check arrives net. If the deposit is the only thing recorded, income is understated by the split and the split never appears as an expense. Profit comes out the same, but the income no longer ties to anything.

Record each closing from the brokerage’s commission disbursement statement instead. Say a buyer-side commission is $9,000 on a 70/30 split, with a $395 transaction fee and a $50 per-closing E&O charge, and $5,855 reaches the bank:

Date	Account	Debit	Credit
Oct 9	Business Checking	5,855.00
Oct 9	Brokerage Splits	2,700.00
Oct 9	Transaction Fees	395.00
Oct 9	E&O Insurance	50.00
Oct 9	Commission Income		9,000.00

In QuickBooks Online, match the $5,855 bank feed line to a deposit with the $9,000 as one line and each deduction as a negative line to its expense account.

At year end, compare Commission Income to the 1099-NEC. Brokerages do not all report the same figure in box 1. Some report the gross commission, and the split is the agent’s expense to deduct. Others report only the agent’s share after the split. If your brokerage reported the gross, your income account should match box 1. If it reported the net, your income account will be higher than box 1 by the total of the splits, and that difference is a reconciling item to document for your preparer, not an error. What you cannot do is deduct a split that was never included in income.

For an agent with $142,000 of gross commissions on a 70/30 split, a 1099-NEC showing $99,400 is the net figure: $142,000 less $42,600 of splits. If the brokerage also netted transaction fees before reporting, those are part of the difference too. Ask the brokerage which basis it uses if the statement does not say.

Standard mileage or actual costs: the one decision with a deadline

The vehicle is the decision worth slowing down for, because the choice you make in the first year limits what you can do later.

The standard mileage rate changed mid-year in 2026. The IRS set the 2026 business rate at 72.5 cents a mile in Notice 2026-10, then raised it to 76 cents for miles driven on or after July 1, 2026 because of higher fuel prices (Announcement 2026-11, on the IRS standard mileage rates page). The 2025 rate was 70 cents. Many published checklists still give one 2026 figure. A mileage log with dates is what lets you apply both.

An agent who drives 4,200 business miles from January through June and 4,800 from July through December:

Period	Business miles	Rate	Deduction
Jan 1 to Jun 30, 2026	4,200	$0.725	$3,045
Jul 1 to Dec 31, 2026	4,800	$0.76	$3,648
Total	9,000		$6,693

The standard rate already includes gas, insurance, repairs and depreciation, so none of those are deducted on top of it. Business parking and tolls are.

The first-year rule. To use the standard rate for a car you own, you have to choose it in the first year you use that car for business (Rev. Proc. 2019-46). After that you can switch to actual costs in a later year. Once you have used actual costs with accelerated depreciation or a Section 179 deduction for that car, you cannot go back to the standard rate for it. An agent who expects a big first-year write-off on a new vehicle should have that conversation with a preparer before filing the first return, not after.

Actual costs means the business-use percentage of gas, insurance, repairs, registration, lease payments or depreciation, and loan interest. It needs the same mileage log, because the log is what proves the percentage. A car driven 9,000 business miles out of 15,000 total is 60% business.

What counts as a business mile. Driving from home to the brokerage office is commuting and does not count. Driving from the office to a showing, between showings, to an inspection or to a closing does. If your home office is your principal place of business, trips from home to those other work locations count too (Rev. Rul. 99-7). The log needs the date, the miles, the destination and the business purpose for each trip, written at the time. A log rebuilt from a calendar in April is weaker than one kept in a mileage app all year.

Home office or brokerage desk

Agents ask whether they can deduct both the desk fee and a home office. The desk fee is a business cost either way. The home office is a separate question with its own tests under IRC §280A: the space has to be used regularly and exclusively for the business, and it has to be your principal place of business. A guest room where you also keep the treadmill fails the exclusive-use test.

The principal place of business test is where agents with a brokerage desk get caught. A home office can qualify if you use it for administrative or management work (paperwork, scheduling, marketing) and there is no other fixed location where you do a substantial amount of that work. If you do your administrative work at the brokerage desk most days, the home office likely does not qualify.

There are two ways to calculate it:

• Simplified method: $5 per square foot, up to 300 square feet, so a 200-square-foot office is $1,000. No depreciation, no expense records beyond the measurement.
• Regular method: the office’s share of rent or mortgage interest, utilities, insurance and repairs, plus depreciation if you own the home, on Form 8829.

Either way, keep a measurement and a photo of the space.

What a real estate agent cannot deduct

• Clothing that works as everyday wear. Suits, dresses and shoes you could wear outside work are not deductible, even if you bought them for showings. The rule is that clothing must be required for the work and not suitable for general wear.
• Entertainment. Tickets to a game with a client have not been deductible since 2018 (IRC §274(a)). A meal during the same event can still be 50% deductible if it is bought separately or shown separately on the receipt.
• Gifts above $25. A $150 closing gift is a $25 deduction (IRC §274(b)). Costs such as engraving, packaging and shipping do not count toward the $25.
• Commuting to your regular office, as above.
• Pre-license education. Courses that qualify you for a new trade or business, such as the course to get your first license, are not deductible as education. Renewal and continuing education courses after you are licensed are.
• Personal costs in the business account. A grocery run paid on the business card does not become a business expense because of the card. It is an owner draw.

The records that make the list hold up

Business expenses need records, but travel, gifts and vehicle use have a stricter standard: the amount, the date, the place and the business purpose, recorded at or near the time (IRC §274(d)). For lodging, and for any other travel or gift expense of $75 or more, the IRS also expects a receipt (Treas. Reg. §1.274-5(c)(2)(iii)).

Four habits cover almost all of it:

1. One business bank account and one business card. Everything above runs through them, and nothing personal does.
2. Every commission disbursement statement saved, matched to its deposit, so the year-end 1099 comparison takes minutes.
3. A mileage log kept as you drive, not reconstructed.
4. A note on every meal and gift with who it was for, written on the receipt or in the transaction memo the day you pay.

Can I deduct expenses without receipts?

Some costs, yes, if you have other reliable evidence such as a bank or card statement and a note of the business purpose. Travel, gifts and vehicle use are the exceptions, under the stricter rules above. The standard mileage rate does not need fuel receipts, but it does need the log.

Do I need to itemize to take these deductions?

No. Schedule C expenses reduce your business profit before your return gets to the choice between the standard deduction and itemizing. An agent can take the standard deduction and still deduct every business expense on the checklist. Itemized deductions (mortgage interest on your home, state and local taxes, charitable gifts) are a separate question.

Can real estate agents take the qualified business income deduction?

Generally, yes, subject to the income limits and other rules in IRC §199A. The regulations exclude services provided by real estate agents and brokers from “brokerage services,” one of the specified service trades whose owners lose the deduction at higher incomes (Treas. Reg. §1.199A-5(b)(2)(x)). How much of it you get is a preparer’s calculation.

Contractors you pay: the 1099 side

Agents who pay a transaction coordinator, an assistant who is not on payroll, or a photographer have a filing of their own. For payments made after December 31, 2025, the 1099-NEC threshold is $2,000 per payee per year, up from $600. Collect a W-9 before the first payment, and track the total per person through the year so you know in January who needs a form. Payments made by card or through a payment app that issues its own 1099-K are generally not reported again on a 1099-NEC.

Estimated taxes from every closing

No one withholds tax from a commission check. Agents pay federal income and self-employment tax through quarterly estimates, due April 15, June 15, September 15 and January 15 of the following year. The bookkeeping habit that makes this painless is moving a set share of each net commission to a separate tax savings account the day it lands; your preparer can tell you what share. The payments themselves are not a business expense. They are recorded as owner draws, as in our fix for estimated tax payments.

When to hand this off

If you are an investor who owns rentals rather than an agent who sells them, the deductions are different, and so are the books; that reader is covered in bookkeeping for real estate.

For agents, the month-to-month work behind this checklist (commissions recorded gross, splits tied to the 1099, mileage and card charges categorized, estimated tax set aside) is laid out on our page on bookkeeping for real estate agents. Ledgerbrook does it in QuickBooks Online from $99 a month, and catch-up work for an agent who is a year behind is priced by the month on the pricing page. How an engagement starts is on the outsourced bookkeeping page.

When to hand this off: if your income in QuickBooks does not tie to your 1099-NEC and you cannot say why, or more than one quarter of commissions went in as net deposits, the year needs to be rebuilt from the disbursement statements before it reaches your preparer. Send the file for a free review, with a written answer within 48 hours.