12 real estate agent tax deductions you shouldn’t miss

As a real estate agent — whether you’re a Realtor®, broker, or self-employed real estate professional — you juggle showings, client calls, contracts and closings. But you may be leaving money on the table at tax time. Many agents ask the same thing: What can a real estate agent write off? 

The answer is: more than you might think. The IRS allows a wide range of tax deductions for real estate agents that can help lower your taxable income. This guide breaks down the most common real estate agent tax deductions so you’re ready at filing time.

Jump ahead to take advantage of these real estate agent tax deductions:

1. Insurance, license fees, and dues
2. State and local taxes
3. Commissions paid to others
4. Home office and utilities
5. Office supplies
6. Office space rent
7. Vehicle expenses and mileage
8. Self-employment tax
9. Advertising
10. Professional services
11. Gifts and meals
12. Education, trade shows, and networking events

Plus, learn about business credits and what expenses are not tax-deductible.

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. You can generally write off the business insurance you carry for your real estate work.

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 calls 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 —sometimes called real estate professional liability — can help cover legal fees, settlements, and judgments related to professional mistakes or omissions.
• You’re hosting an open house when a prospective buyer slips on a wet spot you hadn’t noticed. General liability insurance can help protect you against third-party bodily injury or property damage claims, including 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 apply. Commercial auto insurance can help cover damages, injuries and liability when your vehicle is used for work.
• Your office floods, and your equipment is toast. A Business Owner’s Policy (BOP) bundles general liability and commercial property insurance to help cover unexpected events such as fire, theft or other damage that can disrupt your business.
• Your client database just got hacked, and sensitive information is compromised. Because real estate transactions involve a lot of personal data, cyber insurance can help cover breach-related costs — from notifying affected clients to recovering compromised files.

If you don’t have employer-sponsored health insurance, the premiums you pay may also be tax-deductible. 

Beyond insurance, most agents pay recurring fees to keep their real estate license in good standing. Luckily, that includes license renewal fees, professional membership dues (e.g., NAR, state associations, CRS), MLS access, and even tools like Supra key access.

Don’t forget to track and deduct these expenses throughout the year — they can add up quickly.

2. State and local tax deductions for real estate agents

You’re likely familiar with helping clients understand their property taxes, but it’s just as important to know the taxes that affect your own business. Real estate agents can generally deduct certain state and local taxes (often referred to as the SALT deduction) that relate to their business, including:

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

As of 2025, the cap on SALT deductions has increased to $40,000 (or $20,000 for married individuals filing separately) for many taxpayers — a substantial increase from the previous $10,000 cap. 

That said, the enhanced cap begins to phase out once a filer’s modified adjusted gross income (MAGI) exceeds $500,000 (or $250,000 for married filing separately). For those above thresholds, the benefit gradually phases out.

Because of these changes, it’s worth revisiting your 2025 tax planning — especially if you’re in a high-tax state or have multiple deductible business-related taxes.

3. Commissions paid to others

Have you paid a portion of your commission to other agents or employees who work for you? These payments are generally deductible, and they can add up quickly — especially if you work with co-listing agents, buyer’s agents, transaction coordinators, or other 1099 contractors throughout the year.

For example, if you split a $12,000 commission with a co-listing agent or pay a transaction coordinator to manage paperwork, the amount you pay out is typically considered a deductible business expense.

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 can be a valuable tax deduction for real estate agents, and it’s one many people miss. To qualify, your workspace must meet three basic IRS requirements:

• It must be a dedicated business space.
• You need to use it regularly for your work.
• It should be your primary place of business.

If you maintain a full-time desk at your brokerage and only occasionally work from home, the home office deduction generally doesn’t apply.

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:

1. Simplified method: Deduct $5 per square foot of your home office, up to 300 square feet. For example, a 120 sq. ft. office would give you a $600 deduction.
2. Regular method: Deduct a percentage of your actual expenses, such as utilities, homeowners insurance, mortgage interest, home depreciation, property taxes, and qualifying home repairs.

A tax professional or tax software can help you compare both methods to see which gives you the larger deduction.

Even if you don’t claim a home office deduction, you can still deduct the business portion of your internet and cell phone bills if you use them for work — a common write-off for real estate agents who spend much of their day on calls and emails.

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 backup hard drives
• Desk, chair, and filing cabinets
• Printer ink and toner
• Planners and calendars
• Mailing supplies
• Software subscriptions — such as your CRM, e-signature tools, social media schedulers, accounting software or even listing-related platforms

For real estate agents, tools like virtual tour software, digital lockbox apps or photo-editing tools may also fall into this category.

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. Many real estate agents also pay brokerage desk fees, which often qualify as deductible expenses since it’s similar to renting.

Because rules can vary depending on where you live and how your workspace is structured, it’s a good idea to check with a tax professional who understands real estate deductions. They can help you confirm what qualifies and make sure you’re capturing the full deduction.

Note: If you rent office space, consider whether you need commercial property insurance to help protect your equipment and other business assets. The premiums for that coverage may also be deductible as a business expense.

7. Vehicle expenses and mileage

This real estate agent tax deduction can amount to thousands of dollars if you drive clients to showings or rack up miles managing open houses, previewing listings, or putting up and taking down signs.

For the 2025 tax year, the IRS standard mileage rate is 70 cents per mile when you use your car for business purposes. That means every 100 miles of showings or listing visits could give you a $70 deduction. The IRS adjusts this rate each year, so double-check the updated number when filing.

To take full advantage of the mileage deduction — whether you use the standard mileage rate or switch to the actual expense method — you need accurate records to substantiate your deduction. A simple notebook in your glove box works, or you can use a mileage-tracking app if you prefer a digital solution. The key is making it a habit to log miles regularly.

If you use your vehicle frequently for real estate work, consider commercial auto insurance. Personal auto policies typically don’t cover accidents or damage when a vehicle is used primarily for business, and commercial auto premiums may be deductible as a business expense.

You can also deduct parking fees and tolls when visiting clients or showing properties. Just note that daily parking at your regular office location doesn’t qualify, since the IRS treats your commute as a personal expense.

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 — and it’s another category that may be deductible. Almost everything you spend to promote your services or build your brand can help reduce your taxable income, from basic business cards to larger campaigns.

Common real estate marketing write-offs include:

• Traditional advertising: Print, radio spots, TV segments, local publications, billboards
• Digital marketing: Websites, social media ads, search ads, email campaigns, lead generation tools
• Marketing materials: Business cards, brochures, flyers, listing packets
• Networking costs: Community events, holiday cards, client appreciation items
• Signs and branding: Yard signs, open house signs, banners, directional signs

For example, if you sponsor a local Little League team or neighborhood event to increase visibility, that sponsorship is typically considered a marketing expense.

You can also deduct many property marketing expenses you pay on behalf of clients — such as photographers, videographers, staging, rental furniture, 3D tours, floor plan software and listing signage. These often fall under ordinary and necessary business expenses for real estate agents, so be sure to keep receipts.

Because increased marketing can mean more public exposure, you may want to consider general liability insurance that can help cover advertising injury. The premiums for this type of coverage may be deductible, and it can help 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. The good news: Many of these expert services may be deductible when they meet the IRS standard of being ordinary and necessary for your business operations.

This can include attorney or legal services, CPA fees, bookkeeping support, professional cleaners for your office, business consultants, real estate marketing consultants, virtual assistants and more.

For example, real estate staging services and cleanup typically fall into this category.

Just be sure to separate personal and business expenses. For example, if your accountant prepares both your personal and business returns, ask for an itemized bill that clearly shows the business portion of their services.

11. Gifts and meals

Building relationships is key in real estate, and many agents give client appreciation gifts throughout the year. These gifts may be deductible as long as you follow the IRS 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) with your business name don’t count toward the limit, either.

You may also take clients out for meals to discuss business. These business meals are typically 50% deductible, so it’s important to keep receipts and note who you met with and the purpose of the meeting. A quick note on the back of the receipt — or in your phone — works fine.

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. 

More ways to save with general business credits

The IRS offers a variety of federal business credits that many real estate agents overlook — and they can significantly reduce your tax bill. Unlike deductions, which lower your taxable income, tax credits reduce your tax liability dollar for dollar, making them especially valuable.

The IRS publishes a complete list of these general business credits along with the required forms. Some examples that may be relevant to small real estate businesses include:

• Work Opportunity Tax Credit, which may apply if you hire certain eligible employees
• Disabled Access Credit, if you make your business more accessible
• Small Employer Health Insurance Credit, available to qualifying businesses that provide health coverage to employees

Most of these credits are claimed using IRS Form 3800 (General Business Credit), but each credit has its own qualifying criteria and documentation requirements.

Because these credits can offer substantial savings — and may change from year to year — it’s worth reviewing them with a tax professional to see which ones could 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 what qualifies as a legitimate business expense, and anything outside those rules is considered a non-allowable deduction. For example, real estate agent tax deductions do not include entertainment costs — so you can’t write off concert tickets or sporting events.

You also need to keep family, personal, and living expenses out of your return. Mixing personal and business costs — especially mixed-use expenses — can lead to trouble down the road.

Whether you’re filing self-employed taxes for the first time or have been at it for years, here are some expenses that generally fall into the “not deductible” category:

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

That means repainting your personal living room isn’t deductible — even if you occasionally take business calls there.

The general rule of thumb: If an expense doesn’t directly relate to earning income in your real estate business, it probably isn’t deductible. And stretching the rules can increase your audit risk or lead to penalties.

If you’re unsure whether something counts as a legitimate business write-off, talk with a CPA who handles small business or real estate taxes. They can help you avoid missteps and stay compliant.

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NEXT does not provide tax, legal or accounting advice. This material has been prepared for informational purposes only and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors for personalized guidance.