13 real estate agent tax deductions you shouldn’t miss

As a real estate agent, you’re busy turning property dreams into reality — but there’s serious money sitting on the table in tax deductions you might be missing. The IRS offers numerous write-offs for real estate professionals to reduce their tax burden.

We’ve compiled a real estate agent tax deductions checklist with clear guidance on what you can claim and how to document it properly.

Jump ahead to learn:

• Insurance, license fees, and dues
• State and local taxes
• Commissions paid to others
• Home office and utilities
• Office supplies
• Office space rent
• Vehicle expenses and mileage
• Self-employment tax
• Advertising
• Professional services
• Gifts and meals
• Education, trade shows, and networking events
• Save more with general business credits
• Business expenses that are not tax-deductible
• How NEXT helps protect real estate agents

1. Real estate agent tax deductions: Insurance, license fees, and dues

Agents can deduct a range of insurance-related expenses, including real estate agent insurance premiums. That’s right, you can generally write off every dollar you spend on business insurance.

Real estate comes with specific risks, and a few types of coverage are especially relevant. Here are a few common scenarios that can come up for agents, along with the types of insurance that can help cover each risk:

• A client just called saying you gave them bad advice during their transaction. They’re claiming your oversight cost them thousands, and now they’re suing. Errors and omissions (E&O) insurance can help cover legal fees, settlements, and judgments related to professional mistakes or oversights.
• You’re hosting an open house when a prospective buyer slips on a wet spot you hadn’t noticed. General liability insurance protects you against third-party bodily injury or property damage claims, covering medical expenses and legal costs.
• You’re in an accident while driving to a property showing or client meeting. If you’re using your vehicle for business purposes, a personal auto policy typically won’t cover accidents. Commercial auto insurance covers damages, injuries, and liability for vehicles used in your work.
• Your office floods, and your equipment is toast. A Business Owner’s Policy (BOP) bundles general liability and commercial property insurance to cover unexpected events like fire, theft, or other damage that can disrupt your business.
• Your client database just got hacked, and sensitive information is at risk. Real estate transactions involve a lot of personal data. Cyber insurance helps cover costs related to data breaches, from notifying affected clients to recovering compromised data.

If you don’t have another source of employer-sponsored health insurance, your health insurance premiums are also tax-deductible. 

Beyond insurance, for most realtors, keeping your real estate license up-to-date requires paying fees. Lucky for you, the license renewal fees to keep your license current are also tax-deductible.

Don’t forget to account for professional membership fees and MLS dues — these can also be written off.

2. State and local tax deductions for real estate agents

You’re likely familiar with helping clients understand their property taxes, but what about the taxes that affect your business? You can write off state and local taxes (called the SALT deduction) related to your real estate business, including:

• State income taxes
• Property taxes on your business property
• Local business taxes and fees
• Sales taxes on business purchases

The Tax Cuts and Jobs Act in 2017 put a $10,000 cap on how much you can deduct for state and local taxes if you itemize on your personal return, and the limit applies for single and married filers.

3. Commissions paid to others

Have you paid a portion of your commission to other agents or employees who work for you? Generally, these payments are fully deductible , and these deductions can add up. 

Just remember that anyone you pay $600 or more in commissions during the tax year needs to receive a 1099-NEC form from you by January 31 of the following year. 

4. Home office and utilities

Your home office represents a valuable tax deduction for real estate agents, and it’s one many real estate agents miss. Here’s what makes a home office deductible:

• It must be your dedicated business space (sorry, your kitchen table doesn’t count).
• You need to use this space regularly for work.
• It should be your primary place of business.

For that last point, it’s relevant if you have a real estate office away from home but also do some business at your home office. In that scenario, your home space is not deductible. 

Important note: You must choose between deducting your home office or brokerage desk fees — you can’t claim both. Even if you split time between locations, the IRS wants you to pick one.

If you have a space reserved strictly for business, you have two ways to calculate your deductions:

• The simple route: Deduct $5 per square foot of your home office, up to 300 square feet. 
• The detailed method: Itemize your realtor tax deductions to claim other office-related expenses, such as a percentage of real estate taxes, home improvement expenses, home depreciation, property taxes, homeowners insurance, utilities, and mortgage interest. 

Working with your CPA or tax software, you can determine which calculation method gives you the biggest write-off and choose that one.

Even if you don’t claim a home office deduction, you can deduct a percentage of your internet and cell phone bills if you use those utilities at home for business purposes. 

5. Office supplies

Think about everything you use to keep your real estate business running smoothly. All those receipts you’ve been stuffing in your desk drawer? They’re categorized expenses that can be the source of valuable tax deductions.

When it comes to office supplies, you can write off more than paper, pens, and sticky notes. These business essentials could all qualify:

• Laptop or desktop computer
• Tablets and smartphones used for business
• Printers, scanners, and that backup hard drive
• Desk, chair, and filing cabinets
• Printer ink and toner
• Planners and calendars
• Mailing supplies
• Software subscriptions (CRM systems, social media scheduling tools, accounting software, etc.)

Even small purchases can count. While they might seem insignificant, they can add up to substantial tax savings over the year.

6. Office space rent

Whether you’re renting a private office, leasing a desk at your brokerage, or paying for a spot at a coworking space, those monthly payments can work in your favor at tax time. 

The rent you pay for any business space is generally tax-deductible, including utilities and maintenance fees that might be rolled into your lease.

But tax rules around office rent can vary depending on where you live and work. Your best bet is to chat with a tax professional who knows the ins and outs of real estate deductions. They’ll help you maximize your savings while keeping everything by the book.

Note: If renting your office space, don’t forget about commercial property insurance. It’s smart protection for your business assets, and you can deduct the premiums.

7. Vehicle expenses and mileage

This real estate agent tax deduction can amount to thousands of dollars if you drive your house-hunting clients to showings or rack up miles just managing open houses and putting up and taking down signs. 

For the 2024 tax season, you can take the IRS’ standard mileage deduction of 67 cents per mile when you use your car, truck, or van for business purposes. For every 100 miles of showing houses, you get $67 in deductions. 

This rate is adjusted for inflation, so keep an eye out for the IRS to release updated numbers for 2025.

The secret to taking the full mileage deduction is keeping careful track of the miles you drive for business. You don’t need anything fancy — a simple notebook in your glove box works great, or use a mileage-tracking app if you’re tech-savvy. Just make it a habit to log your miles at the end of each day. 

If you use your vehicle regularly for business, consider commercial auto insurance. Your standard car insurance typically won’t cover accidents or damage when using your vehicle for business. Sure, it’s an additional expense, but the premiums are tax-deductible.

Similarly, while not mileage-related, you can also deduct parking fees and tolls when visiting clients or showing properties. But regular parking fees at your office don’t qualify, as the IRS considers that part of your daily commute.

8. Self-employment tax

As a self-employed real estate agent, you wear both the employee and employer hat regarding taxes. This means you’re responsible for the full 15.3% self-employment tax that covers Social Security and Medicare taxes.

Most employees split this tax with their employer, with each paying 7.65%. But since you’re both the employer and employee in your real estate business, you’re responsible for the full amount.

Fortunately, once you figure out the amount you owe, the IRS lets you deduct half of your self-employment tax from your yearly net income.

9. Advertising real estate agent tax deductions

Marketing is a major expense for real estate agents. But it’s another deductible business expense. Every dollar you spend promoting your services can help reduce your tax bill, from your business cards to billboard campaigns.

Important tax write-offs for realtors include:

• Traditional advertising: Print, radio, TV, billboards
• Digital marketing: Websites, social media ads, email campaigns
• Marketing materials: Business cards, brochures, flyers
• Networking costs: Events, holiday cards, client gifts
• Signs: Yard signs, open house signs, banners

And it’s not just about your own business marketing; don’t forget about property marketing expenses for clients. You might pay for photographers, stagers, rental furniture, signage and more, so remember to track and deduct these expenses.

Keep in mind that increased marketing comes with increased exposure, so consider protecting yourself with general liability insurance that covers advertising injury. Its premiums are a write-off, and it can protect you if someone claims copyright infringement or advertising mistakes.

10. Professional services

Running a successful real estate business often means bringing in professional help. Luckily, the cost of these expert services is tax-deductible when they support your business operations.

This could include attorney or legal services, CPA fees, bookkeepers, professional cleaners for your office, business consultants, virtual assistants, and more. 

Be careful to separate personal and business expenses — for example, if your accountant handles both your business and personal taxes, make sure they provide an itemized bill showing the business portion of their services.

11. Gifts and meals

Building relationships is key in real estate, and you probably give loads of business gifts to clients and associates. Good news — they’re deductible as long as you follow the IRS’s rules.

For business gifts, the IRS caps business gift deductions at $25 per person annually. If you give a client a $100 closing gift, you can only deduct $25 of that expense. A few important notes:

• If you and your spouse give gifts to the same person, the IRS treats you as one taxpayer.
• Incidental costs (engraving, packing, or shipping) aren’t included in the $25 limit if they don’t add substantial value to the gift.
• Small promotional items (under $4.00) with your business name don’t count toward the limit, either.

While not a “gift,” you may occasionally take clients out for meals to discuss business. Business meals are 50% deductible, so keep those receipts and records updated — jot down who you met with and what you discussed on the back of each receipt.

12. Education, training, trade shows, and networking events

Staying current with industry trends and expanding your knowledge isn’t just good business — it’s tax-deductible. Plus, if you’re pursuing formal education, you might qualify for additional tax credits.

Here’s a real estate agent tax deductions checklist for typical professional development expenses you might have:

• Continuing education courses
• Professional training programs
• Industry conferences and trade shows
• Networking event fees
• Educational books and materials
• Online courses and webinars 

If you’re taking college-level courses, you might also qualify for education tax credits. The American Opportunity Credit offers up to $2,500 per student per year if anyone in the household pays tuition, registration fees, and certain expenses during the first four years of their college education. 

13. More ways to save with general business credits

The IRS offers various business credits that many real estate agents don’t know about, and they could significantly reduce your tax bill. Unlike deductions that lower your taxable income, tax credits directly reduce the amount you owe, dollar for dollar.

The IRS publishes a complete list of these general business credits with links to each of the required forms. For example, the Work Opportunity Credit may provide some tax relief for realtors who want to hire employees. 

Each has its own qualifying criteria and required forms. Since these credits can offer substantial savings, it’s worth discussing them with your tax professional to see which ones might benefit your real estate business.

Some business expenses are not tax deductible

Let’s be clear about what you can’t write off as a real estate agent. The IRS has specific rules about business expenses. For example, real estate agent tax deductions must not include any expenses related to entertainment (sorry, no writing off concert tickets).

You must also keep your family, personal, and living expenses out of the equation. Mixing personal with business deductions can lead to headaches down the road.

Whether you’re filing small business taxes for the first time or have been at it a few years, here are some more items that are off the table for deductions:

• Home improvements on your personal residence
• Political contributions or lobbying expenses
• Club memberships and dues
• Personal fines or penalties
• Entertainment expenses
• Personal living expenses

Think of it this way: if an expense doesn’t directly relate to earning income in your real estate business, it probably isn’t deductible. And while it might be tempting to push the boundaries, remember that incorrect deductions can trigger IRS audits and result in penalties.

If you need clarification about what expenses qualify as tax write-offs for realtors, contact a CPA with experience handling small business taxes. They can help you understand the rules that apply to your situation.

How NEXT helps protect real estate agents

NEXT makes getting real estate agent insurance fast, easy, and affordable. We create customized insurance packages specifically for real estate professionals like you — and you can do it all online. No phone tag or paperwork headaches.

You can get the coverage you need right from your laptop or phone. Just answer a few questions online, review your options, and pick your coverage. In about 10 minutes (really!), you’ll have your certificate of insurance in hand.

Not sure what coverage you need? Our licensed insurance pros are right here in the U.S., ready to help.

Start a free quote with NEXT.