15 tax deductions every real estate agent should know (2026)

Being a real estate agent comes with plenty of expenses, but many of them can work in your favor at tax time. This guide highlights 15 deductions real estate agents should know this year, explains how to track and claim them, and shows how bookkeeping software can simplify the process.

Here are 15 key deductions every agent should know for 2026.

Jump to:

• 1. Vehicle expenses and mileage
• 2. Home office
• 3. Marketing and advertising costs
• 4. Office supplies
• 5. Professional fees and education
• 6. Client-related expenses
• 7. Travel expenses
• 8. Health insurance premiums and retirement contributions
• 9. Cell phone and internet bills
• 10. Software and digital tools
• 11. Bank fees and business insurance
• 12. Depreciation on equipment
• 13. Professional appearance
• 14. Charitable contributions tied to business
• 15. Legal and professional services
• Common mistakes real estate agents make (and how to fix them)

1. Vehicle expenses and mileage

Your car is one of the most important tools in your real estate business — and also one of the largest deductions you can claim. In 2025, the IRS standard mileage rate is 70¢ per business mile, so every showing, client meeting, or supply run can quickly add up to significant savings.

There are two ways to calculate this deduction:

• Standard mileage method: Multiply your business miles by the IRS rate. For example, if you drive 12,000 business miles in 2025, your deduction would be $8,400 (12,000 × $0.70).
• Actual expense method: Track all car-related costs (gas, insurance, maintenance, depreciation, etc.) and deduct the business-use portion.

2. Home office

Many agents manage listings, calls, and client follow-ups from home. If part of your home is used exclusively and regularly for work, it qualifies.

There are two ways to calculate this deduction:

• Simplified method: $5 per square foot (up to 300 sq. ft.) per the IRS.
• Actual expenses method: Deduct a portion of rent/mortgage interest, utilities, property taxes, and insurance based on office square footage.

Example: A 200 sq. ft. office under the simplified home office deduction method = $1,000 deduction (200 × $5).

3. Marketing and advertising costs

Marketing is a must in the real estate industry, and nearly every related expense is deductible.

• Print materials: Signs, flyers, postcards, business cards
• Digital campaigns: Social media ads and online property listings
• Listing expenses: Professional photography, videography, and staging services
• Event expenses: Refreshments at open houses or client appreciation parties

Example: $2,500 spent on photography, staging flyers, and social media ads is fully deductible.

4. Office supplies

The basics that keep your business running day to day are deductible. These may seem small, but they add up quickly over a year.

• Pens, paper, envelopes, and notebooks
• Printer ink and toner
• Postage and shipping supplies
• Folders, binders, and filing materials

Example: If you spend $75 a month on general office supplies, that’s a $900 annual deduction.

5. Professional fees and education

Staying licensed and competitive requires ongoing investment, but fortunately, you can deduct related fees.

• Brokerage desk fees, licensing, and MLS dues.
• Coaching programs, continuing education (CE) classes, certifications (e.g., luxury or green home designations).
• Memberships like the National Association of Realtors (NAR).

Example: $600 in CE classes + $1,200 MLS dues = $1,800 deduction.

6. Client-related expenses

Building relationships costs money, but many of these expenses are deductible.

• Meals with clients: 50% deductible if business-related. (Entertainment is not deductible)
• Client gifts: Deduct up to $25 per recipient annually

Example: Dinner with a client costing $120 = $60 deduction (50% rule).

7. Travel expenses

Out-of-town conferences, training, or client meetings? Those are deductible travel expenses. Keep itineraries and receipts to document business purposes.

• Airfare, train, bus, or car travel to a business destination
• Local transportation such as taxis, rideshares, or rental cars (business portion only)
• Lodging and 50% of meals while traveling
• Shipping of business materials, baggage, or staging items
• Tolls, parking fees, laundry, and dry cleaning
• Business calls, internet charges, and tips connected to the trip

Example: A 3-day real estate conference with $800 airfare, $600 hotel, and $300 meals = about $1,750 deductible (meals at 50%).

8. Health insurance premiums and retirement contributions

As a self-employed real estate agent, you may deduct your own health insurance premiums. You can also deduct contributions to retirement accounts, reducing your taxable income while building long-term savings.

• Eligible plans: SEP IRA, Solo 401(k), SIMPLE IRA
• Health insurance deduction applies if you’re not eligible for an employer-sponsored plan elsewhere

Example: $6,000 in annual health insurance premiums + $10,000 Solo 401(k) contribution = $16,000 deduction.

9. Cell phone and internet bills

Your phone and internet are vital for staying connected to clients and listings. Deduct the business-use portion.

• Cell phone bills, including device payments if used for work
• Internet services tied to home office or mobile work

To determine how much is deductible, estimate the percentage of time you use it for business. If about 40% of your calls and data are work-related, then 40% of your bill counts as a deduction. Keep a phone log for a few weeks to support your estimate.

Example: A $200 monthly phone bill with 40% business use equals a $960 annual deduction.

10. Software and digital tools

Digital tools are now a staple of the real estate business. You can deduct the following expenses:

• CRMs, design software, video editing apps, and scheduling tools
• Virtual tour software or marketing platforms
• Cloud subscriptions like Microsoft 365 or Adobe
• Cloud storage like Dropbox or Google Drive

Example: $100/month CRM subscription = $1,200 deductible annually.

11. Bank fees and business insurance

Protecting your business and managing money also creates deductions, such as:

• Bank account and credit card fees tied to business
• Errors & omissions (E&O) insurance
• General liability or cyber insurance

Example: $450 annual E&O premium = $450 deduction.

12. Depreciation on equipment

Typically, “big-ticket” purchases such as cameras, drones, laptops, office furniture, or vehicles used for business had to be depreciated over their “useful life,” meaning you only deduct part of the cost each year. But in 2025, two special provisions changed that:

• Section 179 lets you deduct up to $2.5 million of qualifying purchases in the year you buy them (phases out after $4 million).
• Bonus depreciation is back at 100% for property placed in service after January 19, 2025. Unlike Section 179, it has no spending cap and can even create a loss on paper if your purchases exceed your income.

Example: Buy a $3,000 professional camera in 2025, and instead of spreading the deduction over several years, you can likely deduct the entire $3,000 immediately.

Because the rules can be complex, it’s best to talk to an accountant before making major purchases.

13. Professional appearance

Most clothing isn’t deductible, but there are exceptions.

• Branded apparel with your brokerage logo
• Safety gear for construction site visits

Example: $150 branded jacket with company logo qualifies as a deduction.

14. Charitable contributions tied to business

Supporting your community can build goodwill and, in some cases, provide a tax benefit. The IRS generally treats donations to qualified 501(c)(3) organizations as charitable deductions, which are claimed on your personal return if you itemize. If a payment also promotes your business—such as sponsorships that display your name—it may instead be deductible as a business expense.

• Sponsoring local events or housing fairs in your business name
• Donating materials, equipment, or funds to qualified real estate-related charities

Example: A $500 sponsorship for a neighborhood housing fair could be deductible as a marketing expense if it promotes your business, or as a charitable contribution if it’s purely a donation to a qualified nonprofit.

15. Legal and professional services

Running a real estate business often means leaning on experts, and the fees you pay are deductible.

• Tax preparation services from a CPA
• Legal fees for reviewing contracts, handling disputes, or setting up an LLC

Example: If you pay $1,200 to a CPA for tax prep and $500 to an attorney to review a contract, that’s a $1,700 deduction.

Tax deductions for real estate agents can mean real savings

Most real estate agents are classified as independent contractors, which comes with both flexibility and responsibility. You receive a 1099-NEC instead of a W-2, meaning no taxes are withheld from your commission checks. That also means you must pay self-employment tax (Social Security + Medicare), make quarterly estimated payments, and keep up with deductible business expenses that employees can’t claim.

Because of this setup, deductions play a major role in protecting your income and keeping more of your commissions. But there are a few realities every agent faces that make understanding deductions even more important:

Fluctuating income

Commission-based earnings can swing dramatically from month to month. In a busy season, you might close multiple deals; during slow periods, income can dip. Deductions help balance out these ups and downs by lowering taxable income and stabilizing cash flow.

High business expenses

Running a real estate business isn’t cheap. From mileage and staging to marketing campaigns, association dues, and technology, costs add up quickly. Deductions allow you to offset these necessary expenses so they don’t eat into your hard-earned commissions.

Good recordkeeping is required

The IRS requires accurate documentation, such as logs and receipts, to back up any reported tax deductions. Without proper records, you could lose valuable write-offs or face extra scrutiny.

Common mistakes real estate agents make (and how to fix them)

Even top agents can stumble when it comes to deductions and bookkeeping. Catching these common mistakes early is the key to smoother taxes and fewer surprises.

Mixing personal and business expenses

Using personal credit cards, bank accounts, or cash for business costs is a red flag for the IRS and makes your books messy.

Fix: Open a business bank account and credit card exclusively for your real estate operations.

No receipts or detailed logs

The IRS expects proof. Without itemized receipts or proper logs, deductions may be rejected or reduced. 

Fix: Use bookkeeping software with a mobile app that lets you snap and upload receipts on the spot. For instance, if you spend $120 on open house refreshments, just take a photo of the receipt, tag it as “Client Hospitality,” and it’s instantly stored with the matching transaction. And don’t forget the deductions that are often overlooked, like professional membership fees. 

Skipping vehicle and home office deductions

Many real estate agents think these are risky and skip them, but that means losing legitimate savings.

Fix: Choose either the standard mileage or actual expense method and track consistently. Claim home office only if it meets the “exclusive & regular use” test. See the IRS website for details on qualified business home office expenses. 

Overreporting or rounding too aggressively

Rounding up expenses or inflating categories is tempting but risky.

Fix: Use exact amounts—down to the cent. Keep documentation in case of an audit. Don’t round a $26.43 lunch to $30. Instead, record $26.43 with details (date, place, reason).

Not monitoring changes in tax law

Failing to keep up with tax law changes can cost you valuable deductions or lead to missed opportunities. Each year brings adjustments that affect what you can claim and how much you can save. In 2026, that includes a higher mileage rate, expanded Section 179 limits, and the return of 100% bonus depreciation.

Fix: Keep informed of tax changes by accessing blogs and resources for small business owners and staying in touch with your accountant. 

How QuickBooks helps real estate agents maximize deductions

No one wants to pay more taxes than they have to. QuickBooks combines automation, tailored expense tracking, and integrations with tax pros, making it a go-to bookkeeping software for real estate professionals who want to make the most of their deductions. Here’s how:

Mileage tracking built in

Tracking mileage is a big deal for agents, but it’s easy to forget. QuickBooks has a mileage tracking app that automatically records your drives and lets you label them as business or personal. That means your mileage logs are always up to date—and ready to support one of your largest deductions.

Expense categorization made simple

QuickBooks makes it easy to keep business expenses organized, from digital ad campaigns to listing expenses like professional photography or staging. You can upload receipts, create custom categories (for example, “Marketing – Photography” or “Marketing – Staging”), and let automation do the sorting so you don’t miss out on deductions.

Schedule C-ready reports

At tax time, QuickBooks generates reports that align with Schedule C requirements, including profit and loss statements, expense summaries, and mileage logs. These reports are ready to hand over to your CPA, saving you hours of prep.

Easy collaboration with tax pros

QuickBooks makes it simple to share your books with your CPA. Built-in integrations and secure document sharing mean your accountant can review your deductions and finalize your return faster without giant email chains or missing files.

Automated bank feeds and real-time tracking

QuickBooks connects directly to your business bank and credit card accounts, importing transactions automatically. That means fewer manual entries, up-to-date records, and more accurate expense tracking for deductions.

Custom chart of accounts for real estate

Every real estate business is a little different. QuickBooks allows you to tailor your chart of accounts for commissions, rental properties, commercial deals, or other categories that matter most to you. This gives you clearer insights into income and expenses while maximizing deductions.

Keep more from every closing

The right deductions can reduce taxable income by thousands each year. With QuickBooks helping you track and organize those expenses, that’s money you can reinvest in your business, save for retirement, or keep as take-home pay—making tax strategy just as important as your next closing.