Real estate agent tax deductions can make a huge difference in how much you owe during tax season—especially in your first year on the job. As an independent contractor, you can write off many business expenses to lower taxable income and keep more of your commissions.
At James D. Miller, CPA, we help new agents identify every eligible write-off—because missing even one deduction could cost you hundreds of dollars.
Below are the top 10 real estate agent tax deductions you should know about in your first year.
1. Vehicle Mileage and Expenses
If you drive clients to showings or preview properties, those miles are deductible. You can choose between:
- Standard mileage rate: For 2025, it’s 67 cents per mile.
- Actual expenses: Deduct a portion of fuel, maintenance, insurance, and depreciation based on business use.
Pro tip: Use an app like MileIQ or QuickBooks Self-Employed to automatically track mileage.
2. Marketing and Advertising
Marketing is essential for building your brand and generating leads. Deductible items include:
- Business cards, flyers, and yard signs
- Website design and hosting fees
- Social media ads
- Professional photography and video tours
3. Real Estate Licensing Fees and Dues
Deduct the cost of:
- Initial license and renewal fees
- MLS (Multiple Listing Service) dues
- Memberships in professional organizations like the National Association of Realtors (NAR)
4. Continuing Education
Education is key to staying competitive. You can deduct:
- Required continuing education courses
- Training seminars and workshops
- Online real estate classes
5. Office Expenses
Whether you work in your broker’s office or at home, you can deduct:
- Office supplies (pens, printer ink, paper)
- Postage and shipping
- Computers, printers, and other equipment
6. Home Office Deduction
If you use part of your home exclusively for business, you may qualify.
Two options:
- Simplified method: $5 per square foot (up to 300 sq. ft.)
- Actual expenses: Deduct a percentage of rent/mortgage, utilities, insurance, and repairs.
7. Technology and Software
The tools you use to run your business are deductible, such as:
- CRM software
- E-signature tools (e.g., DocuSign)
- Virtual tour and photo editing apps
- Accounting and bookkeeping software
8. Professional Services
Fees paid to professionals also qualify. This includes:
- CPAs or tax preparers
- Bookkeepers
- Business coaches or consultants
- Legal services
9. Client Gifts and Meals
- Client gifts: Deduct up to $25 per recipient per year.
- Business meals: Deduct 50% of meals directly related to business, like taking a client to lunch after a showing.
10. Insurance Premiums
As a real estate agent, you may be able to deduct:
- Errors and Omissions (E&O) insurance
- General liability insurance
- Health insurance premiums (if you’re self-employed and not covered elsewhere)
Pro Tips for Real Estate Agent Tax Deductions
- Keep organized records: Save receipts, invoices, and bank statements.
- Separate finances: Use a dedicated business bank account.
- Track expenses year-round: Don’t wait until April to catch up.
Why Real Estate Agent Tax Deductions Matter in Your First Year
Understanding and claiming all eligible deductions can significantly reduce your tax bill—especially when you’re just starting out and every dollar counts.
At James D. Miller, CPA, we specialize in guiding first-year real estate agents through tax rules, maximizing deductions, and helping you keep more of your income.
Don’t leave money on the table. Contact James D. Miller, CPA at jdmcpa4u.com for expert tax planning and preparation tailored for real estate professionals.