Taxes for agents who get paid on commission
We handle the Schedule C, the deductions tied to your listings, and the quarterly payments nobody withholds for you. In English or Spanish, including returns that cross state lines.
Nothing is due today. Personal returns start at $250.
Your income arrives in lumps, months apart, with nothing taken out for taxes. The Form 1099-NEC from your brokerage may not match what actually reached your account, because the split, the franchise fee and the referral you paid can all sit inside that number. And the costs of winning a listing leave your pocket long before a closing pays you back.
What realtors can usually deduct
Ordinary and necessary costs of your work. Rules and dollar limits change year to year, so we confirm every one of these against the current year when we prepare your return.
Brokerage splits and desk fees
Your commission split, desk fee, franchise fee, transaction fee and any technology fee the brokerage charges you are business expenses. So are referral fees you paid to another agent or a relocation company.
Some brokerages report the gross commission on your Form 1099-NEC before the split comes out. If that happens, you report the full amount and deduct the split and fees, or you pay tax on money you never kept. Bring your commission statements so we can tie it out.
MLS and association dues
MLS access, local board dues, state and national association dues, and lockbox or key service fees.
The share of your dues that the association allocates to lobbying or political activity is not deductible. Your association usually shows that portion on the invoice or in a separate notice, so keep it with the receipt and tell us if you do not see one.
License renewal and CE
Your state license renewal, continuing education, post license courses, broker license upgrade and specialty designation coursework.
The pre license course you took to get into the business is generally not deductible, because education that qualifies you for a new trade does not count. Education that maintains the license you already hold does.
Errors and omissions coverage
E&O premiums, general liability, and any business policy you carry on your own. If the brokerage deducts E&O from each closing, that counts too.
Count it once. If the fee is already coming out of your commission on the disbursement statement, do not also deduct it as a separate payment.
Driving to showings and closings
Miles to listing appointments, showings, previews, inspections, appraisals, the title company and closings. You can use the IRS standard mileage rate for that year or your actual vehicle costs times your business use percentage.
Driving between your home and a regular work location such as your brokerage office is commuting and is not deductible. A written log with dates, destinations and purpose is what makes the rest of it hold up, and the method you choose the first year you put a vehicle in service can limit what you are allowed to switch to later.
Getting a listing to market
Yard signs, riders, directional arrows, brochure boxes, lockboxes, professional photography, drone shots, floor plans, 3D tours, print flyers and rented staging furniture for a seller's home.
Staging pieces you buy and later keep in your own house are not deductible. Sign inventory, camera gear and other equipment that lasts beyond the year is generally written off over several years, though elections exist that can let you deduct more of it up front, so keep the purchase date and the receipt.
Lead generation and farming
Portal leads, pay per click and social ads, farming postcards and mailers, just listed and just sold cards, your IDX website and domain, and open house promotion.
Sponsoring a local team or event is advertising when your name and contact information appear. A straight donation with no promotion is a charitable contribution instead, and it goes somewhere else on the return.
CRM, e-sign and phone
Your CRM, transaction management and e-signature software, showing and scheduling apps, design and video subscriptions, cloud storage, plus the business share of your cell phone and home internet.
Your phone is not one hundred percent business. Pick a defensible business percentage, write down how you arrived at it, and use the same one consistently.
Closing gifts and client events
Closing gifts, pop by items, client appreciation parties and holiday cards to your database.
The tax law caps the deduction for business gifts to any one client per year, so ask us for the current figure before you buy the expensive bottle. Low cost items permanently imprinted with your name and handed out widely are treated as advertising rather than gifts.
Meals with clients and lenders
Coffee with a lender, lunch with a client after a walkthrough, a meal with a referral partner. Write the name and the reason on the receipt while you still remember it.
Business meals are deductible only at the percentage the law allows for that year, and entertainment such as ballgame tickets or a round of golf is not deductible at all. A meal you eat alone between showings in your own area is personal.
Home office
If you have a space used only and regularly for your real estate work, you can deduct a share of your rent or mortgage interest, property tax, insurance, utilities and internet, or use the simplified method the IRS allows based on the square footage of the space.
Exclusive use is strict. The kitchen table does not qualify, and neither does the guest room your in laws sleep in. The deduction is also limited by the profit from your business, and a desk at your brokerage can complicate the claim, so tell us where you actually do your admin work.
Assistants and transaction coordinators
Transaction coordinators, showing assistants, inside sales agents, virtual assistants, bookkeepers and photographers you pay directly.
Get a Form W-9 before the first payment, not in January. If you pay an unincorporated helper more than the IRS reporting threshold for the year, you have to issue a Form 1099-NEC, and you cannot do that without their information. How you direct and control the work also decides whether that person is a contractor or an employee, so tell us how the arrangement really runs.
Schedule C is the starting point for an agent paid on commission with no entity. An S corporation only makes sense once profit is consistently high enough that the self employment tax savings outweigh payroll, reasonable compensation to yourself, a second tax return and any state licensing steps required before a brokerage can pay an entity instead of you.
What to bring us
You do not need all of it to start. Send what you have and your checklist shows what is still open.
- Every Form 1099-NEC you received, from your brokerage and from any team, referral or bonus income
- Your year end commission or production report from the brokerage, so the splits and fees can be matched against the 1099
- Business bank and credit card statements for the year, or your bookkeeping file
- Your mileage log or app export, showing business miles and total miles driven
- MLS, board and association dues invoices, including any notice showing the nondeductible lobbying portion
- License renewal and continuing education receipts
- Receipts for anything large you bought, such as a vehicle, camera, laptop or sign inventory
- Home office figures: square footage of the space and of the home, plus rent or mortgage interest, property tax, insurance and utilities
- Health insurance records, including Form 1095-A if you bought coverage through the marketplace
- Dates and amounts of any estimated tax payments you already made
What trips people up
Reporting only what landed in your bank account
Start from what the brokerage reported on the 1099, then deduct the split, desk fee, franchise fee, E&O and referral fees. The return should tie to the form the IRS already has.
Reconstructing a year of driving in April
Turn on a mileage app now and write down your odometer at the start and end of the year. Miles remembered after the fact are not a record.
Spending the whole commission check
Move a set share of every closing into a separate account the day it hits, and make the estimated payments from there. Income tax and self employment tax both come due on that money.
Deducting the wardrobe
Clothing that works as everyday clothing is not deductible, even if you only wear it to showings. Haircuts, grooming and gym memberships are personal too. Ask before you assume a branded item counts as advertising.
Paying a helper with no paperwork
Collect a Form W-9 before the first payment to any assistant, coordinator or contractor, and let us know at year end who you paid and how much.
What it costs
Our published list, the same one everyone sees. Prices marked "from" are starting points, and your exact number is confirmed in writing before any work begins.
$0 is due today. You pay when you sign, or you can have your fee come out of your refund, so it can be $0 out of pocket.
Questions we get from your trade
My 1099 is bigger than what actually hit my account. Is it wrong?+
Often it is not. Some brokerages report the gross commission and take the split and fees out afterward. You report the amount shown on the form and deduct everything the brokerage kept, which is why we ask for your commission statements. Reporting it that way lines your return up with what the IRS already has on file.
Can I write off my car?+
You can deduct the business use of it. That is either the IRS standard mileage rate for that year applied to your business miles, or your actual costs multiplied by your business use percentage. Driving between home and your brokerage office is commuting and does not count, and the method you pick the first year a vehicle goes into service can limit your options later, so talk to us before you buy or lease.
Do I need an LLC or an S corp?+
A single member LLC by itself does not change your federal income tax. It is a liability and licensing question first, and state rules vary: some states require the entity itself to be licensed or registered with the real estate commission before a brokerage is allowed to pay it instead of you. An S election may lower self employment tax once your profit is consistently strong, but it requires payroll and reasonable compensation to yourself, plus a separate return and real ongoing cost, so we run your actual numbers before recommending it.
I have a license. Does that make me a real estate professional for taxes?+
Not by itself. Real estate professional status is a separate test in the tax law based on hours worked in real property trades or businesses and on material participation, and it matters for losses on rental property you own, not for your commission income. We look at it year by year against your actual hours.
Do I have to pay quarterly?+
Nobody withholds from a commission check, so income tax and self employment tax on your profit are generally paid in during the year through estimated payments, or through extra withholding from a spouse's paycheck. Skipping them can add a penalty even if you pay the full balance in April. After a big closing month is a good time to call us and adjust the number.
Is there anything I can still do after December 31?+
Sometimes. Some retirement plans can still be set up or funded after the year closes and others have to be in place before it ends, and the deadlines differ by plan type, so ask rather than assume one is still open to you. The self employed health insurance deduction depends on your net profit and on whether you were eligible for coverage through an employer or a spouse. These choices are easier to work with in November than in April, so a short year end call is worth having.
Let us take the tax part off your plate.
Tell us what you need and see your price. A real person on your team replies within one business day.