What Can You Write Off on Taxes as a Real Estate Agent?

Real estate agent tax write-offs cover almost every ordinary cost of running your business — mileage, marketing, licensing, insurance, technology, home office, part of your meals, and more — and most of them go on Schedule C of Form 1040, where they reduce both your income tax and your self-employment tax. On top of Schedule C, several powerful deductions live elsewhere on your return: self-employed health insurance, one-half of self-employment tax, retirement plan contributions, and the 20% qualified business income deduction. The catch is that every write-off has to be documented, and a few expenses agents assume are deductible are not.

The Ordinary and Necessary Test

Every business deduction starts with the same two-word standard. The expense has to be ordinary, meaning common and accepted in the real estate industry, and necessary, meaning helpful and appropriate for the business. It does not have to be indispensable.¹ MLS dues clear that bar easily. A first-class upgrade to attend a local open house does not.

Business income and expenses go on Schedule C (Form 1040), Profit or Loss From Business.² The net profit flows to your 1040 and also becomes the base for your self-employment tax, so every legitimate deduction knocks down two bills at once.

Vehicle and Mileage

Driving is the biggest deductible expense for most agents. Showing properties, meeting clients, running to inspections, delivering lockboxes — it all counts as business mileage. You pick one of two methods each year.³

The standard mileage rate for 2026 is 72.5 cents per mile.⁴ It covers gas, oil, maintenance, insurance, and depreciation in one figure. Drive 15,000 business miles and you get a $10,875 deduction with almost no math beyond your odometer.

The actual expense method means tracking fuel, repairs, tires, insurance, registration, lease payments, and depreciation, then multiplying by your business-use percentage. It sometimes beats the standard rate, especially on newer or more expensive vehicles, but the recordkeeping is heavier. If you use actual expenses in the first year a vehicle is available for business, you generally cannot switch to the standard rate for that vehicle later.³

Either way, you need a contemporaneous mileage log with the date, destination, business purpose, and miles for every trip. Parking and tolls are deductible on top of either method. Two lines worth remembering: driving from home to your regular brokerage office is commuting and never deductible; driving from a qualifying home office to a showing or client meeting is business mileage.

Marketing and Advertising

Everything you spend to generate leads and promote listings is deductible.

Print materials: yard signs, business cards, flyers, brochures, and print ads.
Digital marketing: website development, hosting, SEO services, pay-per-click, and social media ads.
Listing promotion: professional photography, drone video, virtual staging, and 3D tours.
Open house costs: refreshments, printed materials, and temporary staging items.

Branded promotional items you hand out — pens, notepads, magnets with your logo — count as advertising rather than gifts, so they escape the $25 per-recipient gift cap covered below. If the item is clearly promotional and widely distributed, it lives in the advertising line.

Licensing, Dues, Insurance, and Education

The recurring fees that keep you legally in business are all deductible:

State real estate license renewal (usually every two years).
MLS access dues.
National Association of Realtors and state or local Realtor board dues.
Errors and omissions (E&O) insurance.
General business liability insurance.

Continuing education required to keep your license is fully deductible, including tuition, materials, and travel. Voluntary designations such as the Certified Residential Specialist (CRS) or Accredited Buyer’s Representative (ABR) qualify too, because they improve skills in a profession you already practice.

Pre-licensing education is where agents get tripped up. Courses, exam prep, and fees you paid before earning your initial license are not deductible, because the IRS treats them as qualifying you for a new profession. The same logic has been applied to moving from a salesperson license to a broker license. If your pre-licensing courses were at an accredited institution, you may be able to claim the Lifetime Learning Credit instead, worth up to $2,000 per year on qualifying tuition.

Home Office

If you use part of your home exclusively and regularly as your principal place of business, or as a space where you meet clients, you can claim the home office deduction.⁵ “Exclusively” is what trips people up. A guest room that also holds your desk does not qualify. A corner of the kitchen table does not qualify. A dedicated room with a door that you use only for work does.

Two ways to calculate it:

Simplified method: $5 per square foot, up to 300 square feet, for a maximum $1,500 deduction. Minimal paperwork, no depreciation to track or recapture when you sell the home.⁵
Regular method: take the business-use percentage of the home’s square footage and apply it to actual costs such as mortgage interest, property taxes, utilities, insurance, repairs, and depreciation. Report the results on Form 8829.⁶

The regular method usually produces a larger deduction, but the depreciation on the business portion has to be tracked and can be recaptured as taxable income when you sell. Many agents pick the simplified method to sidestep that.

Agents who rent a separate office or desk space at a brokerage deduct that full cost directly on Schedule C, along with utilities and internet for that space, without any allocation math.

Technology, Equipment, and Supplies

Software subscriptions that run the business are fully deductible: CRM platforms, transaction management, e-signature services, virtual tour tools, and cloud storage. Items with both personal and business use have to be prorated. A cell phone used 70% for work means you deduct 70% of the bill. There is no IRS-blessed formula; the standard is “reasonable and consistent.” Track usage for a representative week or two, calculate a percentage, and apply it the same way all year. Home internet follows the same logic.

When you buy a computer, tablet, printer, or camera, Section 179 expensing lets you deduct the full purchase price in the year you place the item in service rather than depreciate it over years.⁷ For the equipment a typical agent buys, the Section 179 limits are more than generous. If the item is also used personally, you deduct only the business-use percentage.

Ordinary administrative costs round out the smaller write-offs that add up: office supplies, postage, printing, copying, business bank account fees, and transaction coordinator services. Referral fees paid to other agents or brokerages are deductible; when payments to any single non-corporate recipient hit $600 or more in a calendar year, you also have to issue that person a Form 1099-NEC.

Meals, Gifts, and Travel

Taking a client or referral partner to lunch is deductible at 50% of the bill.⁸ The meal cannot be lavish, you or an employee has to be present, and you should note the date, restaurant, amount, who attended, and what business was discussed. The temporary 100% deduction for restaurant meals from 2021–2022 has expired.⁹

Business gifts are capped at $25 per recipient per year.¹⁰ The limit has not been adjusted for inflation in decades. A $200 closing gift means you deduct $25 and absorb the rest. Branded items with your business name on them fall under advertising instead of gifts and skip the cap.

Overnight business travel unlocks its own set of deductions: airfare, train and bus tickets, rental cars, and lodging.¹¹ Meals during business travel are deductible at 50%. The trip must take you far enough from your tax home to require sleep or rest. Real estate conferences, out-of-town designation courses, and meetings with referral partners in other cities all qualify. Keep the itinerary, receipts, and notes on the business purpose.

Deductions That Live Off Schedule C

Several of the most valuable write-offs for an agent do not appear on Schedule C at all. They show up as adjustments to income on Form 1040 and reduce your adjusted gross income.

Self-Employed Health Insurance

You can deduct premiums for medical, dental, vision, and qualified long-term care insurance covering yourself, your spouse, your dependents, and your children under age 27.¹² Two limits apply. The deduction cannot exceed your net business profit, and you cannot claim it for any month you were eligible to participate in a subsidized health plan through a spouse’s employer or another source. This deduction lowers your income tax but not your self-employment tax.

Half of Self-Employment Tax

You pay both halves of Social Security and Medicare — 15.3% on net earnings up to the Social Security wage base, plus 2.9% Medicare above that. One-half of the self-employment tax is deductible as an adjustment to income on Schedule 1 of Form 1040.¹³ It mirrors the employer’s deductible share on the W-2 side.

Retirement Plan Contributions

Self-employed retirement contributions are deducted on Form 1040, not Schedule C, and they reduce your taxable income substantially. Three plans fit most solo agents:

SEP IRA: up to 25% of net self-employment income (after the SE tax deduction), maxing at $72,000 for 2026. Easy setup, no annual filing, flexible year-to-year contributions, no catch-up option.¹⁴
Solo 401(k): employee deferral of up to $24,500 for 2026 plus an employer profit-sharing piece of up to 25% of net self-employment earnings, combined ceiling $72,000. Catch-up contributions add $8,000 (ages 50–59 or 64+) or $11,250 (ages 60–63). Usually the most flexible option for higher-income agents.
SIMPLE IRA: employee deferrals up to $17,000 for 2026 plus a required employer match. Lower ceiling, simpler if you have a small number of employees.

Qualified Business Income Deduction

The QBI deduction lets eligible self-employed taxpayers deduct up to 20% of qualified business income, calculated from Schedule C net profit after subtracting the deductible half of SE tax.¹⁵ It reduces income tax only, not SE tax.

Real estate agents catch a break here that some tax preparers miss. The IRS regulations specifically exclude real estate agents and brokers from the “brokerage services” category that would otherwise make them a Specified Service Trade or Business.¹⁶ The SSTB label applies to stock brokers and similar financial professionals, not people who broker real property. SSTBs fully phase out of the QBI deduction at higher incomes; non-SSTB agents do not.

For 2026, agents with taxable income below $203,000 (single) or $406,000 (married filing jointly) get the full 20% deduction with no additional tests. Above those thresholds, the deduction is not eliminated but is limited based on W-2 wages paid and qualified property. Most solo agents operating as sole proprietors pay themselves no W-2 wages, so this cap can shrink or zero out the deduction for high earners, and entity structuring becomes worth a conversation with a tax professional.¹⁷

What You Cannot Write Off

A handful of expenses feel deductible but are not.

Pre-licensing education, exam fees, and prep materials — the IRS treats these as qualifying you for a new profession.
Commuting from home to a fixed brokerage office, no matter how many work calls you take in the car.
Entertainment. Taking a client to a game, concert, or round of golf has not been deductible since 2018. Food and drinks at those events can still be 50% deductible, but only if the cost is stated separately on the bill.
Business-casual or professional clothing. Only truly specialized uniforms or costumes qualify; anything suitable for everyday wear is personal.
Political and lobbying contributions, including the political advocacy portion of NAR dues.
Fines and penalties, including traffic tickets and late licensing penalties.

Estimated Taxes Because Nobody Withholds for You

No one is withholding from your commission checks, so the IRS expects quarterly payments. You generally need to make estimated payments if you expect to owe $1,000 or more when you file.¹⁸ To avoid an underpayment penalty, pay at least 90% of your current-year tax or 100% of last year’s tax, whichever is less; if your prior-year AGI exceeded $150,000 ($75,000 if married filing separately), the prior-year safe harbor rises to 110%.¹⁹ Most agents use the prior-year method because commission income is hard to predict. Pay through IRS Direct Pay, EFTPS, or the IRS payment portal.²⁰

Records That Actually Back Up Your Deductions

Every deduction is only as good as the records behind it. The IRS asks you to keep documentation until the statute of limitations runs out, generally three years from filing.²¹ For each expense, capture four things: amount, date, business purpose, and payee. Receipts, bank statements, and credit card statements all work, and a dedicated business bank account and card make the paper trail nearly automatic.

Mileage logs get special scrutiny. A log reconstructed at year-end from memory rarely survives an audit. Use a tracking app that captures trips in real time and back it up. For any expense that straddles personal and business use — phone, internet, home office, vehicle — write down the method you used to calculate the business percentage and apply it the same way all year. Consistency is what auditors respect, right after documentation.

1
Internal Revenue Service. IRS Publication 535 – Business Expenses
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Internal Revenue Service. Instructions for Schedule C (Form 1040)
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Internal Revenue Service. Topic No. 510, Business Use of Car
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Internal Revenue Service. IRS Sets 2026 Business Standard Mileage Rate at 72.5 Cents Per Mile
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Internal Revenue Service. Simplified Option for Home Office Deduction
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Internal Revenue Service. Form 8829 – Expenses for Business Use of Your Home
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Office of the Law Revision Counsel. 26 U.S. Code 179 – Election to Expense Certain Depreciable Business Assets
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Internal Revenue Service. Publication 463 – Travel, Gift, and Car Expenses
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Internal Revenue Service. What Businesses Need to Know About the Enhanced Business Meal Deduction
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Internal Revenue Service. Income and Expenses 8
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Internal Revenue Service. Topic No. 511, Business Travel Expenses
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Internal Revenue Service. Instructions for Form 7206 – Self-Employed Health Insurance Deduction
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Internal Revenue Service. Schedule SE (Form 1040) Self-Employment Tax
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Internal Revenue Service. SEP Contribution Limits (Including Grandfathered SARSEPs)
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Internal Revenue Service. Qualified Business Income Deduction
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eCFR. 26 CFR 1.199A-5 – Specified Service Trades or Businesses and the Trade or Business of Performing Services as an Employee
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Office of the Law Revision Counsel. 26 U.S. Code 199A – Qualified Business Income
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Internal Revenue Service. Estimated Taxes
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Internal Revenue Service. Topic No. 306, Penalty for Underpayment of Estimated Tax
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Internal Revenue Service. Payments
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Internal Revenue Service. How Long Should I Keep Records