Top 5 Tax Write-Offs for Real Estate Agents

Published On: January 30th, 2023Categories: Real Estate, Tips and TricksLast Updated: February 2nd, 202312.2 min read

About the Author: Nicole Schnell

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tax write-offs for real estate agents

Tax season is here and real estate agents everywhere are gathering their receipts. It may not be a fun time, but it can be a good time if you know how to save money on your taxes. Most agents invest a lot of money upfront to get their license, find a brokerage, attract clients, and then help those clients buy and sell real estate. Fortunately for you, many of these expenses can be deducted each year. Let’s look at the top five tax write-offs for real estate agents that will save more of your commission.

#1: Agent Dues & Fees

Each year, sometimes multiple times a year, you pay dues to an association, an MLS, and your brokerage. Not to mention what you spent to get your license in the first place. Well, the IRS has great news! You can deduct these dues from your annual taxable income, including E&O insurance, desk fees, and any other fees associated with maintaining your license.

#2: Education Costs

Part of maintaining your license includes completing continuing education courses throughout your career. Your CE courses are tax-deductible, as well as other classes, seminars, and coaching that you participate in to further your business. So, you can learn how to close more sales and keep more money in your pocket? That’s a no-brainer – sign up for that class and then write it off!

#3: Marketing & Advertising Costs

Everyone knows you’ve got to spend money to make money. Marketing and advertising are huge costs for agents, but they’re the most necessary ones. It’s pretty difficult to sell a home that no one knows about! Thankfully, you can write off the costs of open house signs, flyers, business cards, sales ads, property websites, and more. So, go ahead and run that online ad campaign!

#4: Office Space & Supplies

Be sure to save all your receipts, especially when it comes to office supplies. Every pen, folder, ink cartridge, and clipboard you use for your business can be deducted. If you work from home, you can deduct a percentage of costs related to your home office, such as furniture, utilities, property insurance, and repairs. And don’t forget to account for depreciation, when applicable.

#5: Phone Usage & Mileage

Real estate agents are usually either on the phone or out driving around neighborhoods (or both at the same time!). Keep track of every call minute and every mile traveled. It may seem tedious, but you’ll thank yourself later when you have a detailed record of when you used your phone and car for business. You can also (partially) write off your car insurance, regular maintenance, and the vehicle itself through depreciation.

Hopefully, tax season doesn’t seem quite so scary anymore. It’s all part of the job and can even be used to your benefit, putting more commission back in your pocket. And don’t forget to take advantage of the tax prep write-off! Hire a professional to help file your taxes and you can write off a portion of the fees you pay them. Plus, there are even more tax write-offs for real estate agents than what we’ve listed here. Check out this resource for more deductions and where to put them on your tax form.

*Square Foot Productions and its affiliates do 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 before engaging in any transaction.

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