Tax Deductions for Real Estate Agents
Most agents are self-employed and file Schedule C, so every deduction counts. Here are the big ones, mileage, marketing, dues, and the home office, plus the QBI deduction and the 25 dollar gift trap.
Most real estate agents are self-employed independent contractors. The brokerage pays your commissions on a 1099-NEC, you file a Schedule C, and you owe self-employment tax of 15.3 percent on top of income tax. That makes every legitimate deduction worth real money. Here are the ones agents most often have, and the ones they most often miss.
Your car is usually the biggest one
Driving to showings, inspections, and client meetings adds up fast. For 2025 the standard mileage rate is 70 cents per mile, or you can use the actual-expense method and deduct the business share of gas, repairs, insurance, and depreciation. You have to pick one method per vehicle and keep a mileage log either way. Our guide to the best way to track mileage covers the logging rules.
The agent-specific deductions
- Commissions and referral fees paid to other agents, fully deductible.
- Marketing: signage, listing photography, mailers, your website, and online ads.
- Desk fees and broker fees, plus your license renewals, MLS dues, and board or association memberships.
- Errors and omissions insurance, your cell phone's business share, and your CRM and lead-gen software.
- Continuing education that maintains your current skills.
If you pay another agent 600 dollars or more in a year, remember you owe them a 1099-NEC.
Home office and the 25 dollar gift trap
If you handle your administrative work from a space used regularly and only for business, you can claim the home office deduction, even if you meet clients elsewhere. Watch the gift rule, though: business gifts are deductible only up to 25 dollars per recipient per year, so that 100 dollar closing gift is just 25 dollars deductible. Incidental costs like gift wrap do not count against the 25 dollars.
Don't skip the QBI deduction
Real estate agents and brokers are not treated as a specified service business, so they qualify for the qualified business income deduction of up to 20 percent, which the 2025 tax law made permanent. Even higher-earning agents can claim it, subject to the wage and property tests above the income thresholds.
Track deductions while you drive and spend
Logging mileage and categorizing expenses as they happen means your Schedule C is built before tax season, not reconstructed from memory.
Start freeHow Vuuv helps
Vuuv is built for self-employed work like yours. The mobile app can track your showing and meeting miles with GPS, you categorize commissions, marketing, dues, and insurance into the expense buckets that map to Schedule C, and on the Pro and Elite plans Vuuv generates a Schedule C report that pulls it together. Whether you file yourself or hand it to a preparer, the deductions are captured all year.
Frequently asked questions
What is the mileage deduction for real estate agents in 2025?
The 2025 IRS business standard mileage rate is 70 cents per mile for business driving, like showings, client meetings, and trips to the office if you have a qualifying home office. You can instead use the actual-expense method, but you must choose one method per vehicle per year and keep a mileage log either way.
Can a real estate agent deduct commissions paid to other agents?
Yes. Commissions, referral fees, and split payments to other agents are fully deductible on Schedule C. If you pay any non-corporate recipient 600 dollars or more in a year, you must also issue them a Form 1099-NEC.
Do real estate agents qualify for the 20 percent QBI deduction?
Yes. Real estate agents and brokers are specifically excluded from the specified-service category, so they qualify for the qualified business income deduction of up to 20 percent, which the 2025 tax law made permanent. Above the income thresholds the deduction is limited by wage and property tests rather than phased out entirely.
How much can I deduct for client closing gifts?
The IRS caps business-gift deductions at 25 dollars per recipient per year, so a 100 dollar closing gift is only 25 dollars deductible. Incidental costs like engraving or gift wrap do not count toward the 25 dollars, and promotional items costing 4 dollars or less with your name on them are not treated as gifts.
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This article is general information, not tax advice. Tax rules change and every situation is different. Confirm the details against current IRS guidance or talk to a qualified tax professional before you file.