Real Estate Agent Tax Deductions | Jessica Gonzalez, CPA

Jessica Gonzalez, CPA | Published October 5, 2026

Hand checking off items on a checklist with a stylus

Most Texas real estate agents paid on commission are self-employed, so their business costs go on Schedule C. Common deductions include brokerage splits and fees, MLS and association dues, license and continuing education costs, E&O insurance, marketing and lead generation, software, the business share of your phone, car expenses, and a qualifying home office. Client gifts are capped at $25 per person per year, and business meals are generally 50% deductible.

For 2026, the IRS business mileage rate is 72.5 cents per mile for January through June and 76 cents per mile from July 1 through December 31, so your mileage log needs dates.

Are real estate agents self-employed for taxes?

Usually, yes. Licensed agents whose pay is tied to sales, not hours, and who work under a written contract saying they aren’t employees for federal tax purposes are statutory nonemployees. They “are treated as self-employed for all federal tax purposes, including income and employment taxes,” according to IRS Publication 15-A.

Nothing is withheld from your commissions, so you generally make estimated payments. For how much to hold back from each closing, see how much real estate agents should set aside for taxes.

The ordinary and necessary test, in plain English

Business deductions come from Internal Revenue Code section 162. The IRS explains it this way in Publication 583: “An ordinary expense is one that is common and accepted in your field of business, trade, or profession. A necessary expense is one that is helpful and appropriate for your business.”

Personal costs are not deductible, and mixed-use costs get split. Publication 583 says you “must divide your expenses between business and personal use,” and for a car you can divide by miles driven. Use the same logic for your phone and internet, and keep a note of how you figured the business share.

Real estate agent tax deductions checklist

These are the costs I see most often on agent returns.

Brokerage splits, desk fees, and transaction fees

Brokerages report commissions differently, so compare your Form 1099-NEC with your annual commission statement:

If it shows gross commission, the split and fees the brokerage kept are deductible expenses.
If it shows only the net paid to you, the split is already out of income. Don’t deduct it again.
Monthly desk fees, technology fees, and E&O fees you pay separately are deductible either way.

The Schedule C instructions say gross receipts should include amounts “properly shown on your Forms 1099-NEC,” so the two need to match.

Licensing, dues, and insurance

MLS fees and local, state, and national association dues.
License renewal fees paid to the Texas Real Estate Commission (TREC).
Continuing education. TREC requires 18 hours each two-year license period for sales agents.
Errors and omissions insurance and business liability coverage.

Marketing, software, and supplies

Signs, riders, lockboxes, listing photography, and printed materials.
Your website, online advertising, and paid lead services, including portal leads.
CRM, e-signature, and transaction management software.
The business share of your cell phone and home internet, plus office supplies.

Client gifts and business meals

Closing gifts are deductible up to a limit. Under Publication 463, “you can deduct only $25 per person per year for gifts you give to any individual.” Incidental costs like engraving, wrapping, and shipping don’t count toward the $25.

Business meals are generally 50% deductible if the meal isn’t lavish and you are present. Entertainment, like game or concert tickets, is not deductible.

Car expenses: standard mileage or actual costs

You can use the standard mileage rate or actual expenses (gas, repairs, insurance, depreciation) times your business-use percentage. To use the standard rate for a car you own, “you must choose to use it in the first year the car is available for use in your business,” according to IRS Topic 510. Business parking and tolls are deductible under either method.

2026 has two rates. The IRS set the 2026 business rate at 72.5 cents per mile, then raised it to 76 cents for miles driven on or after July 1, 2026, because of fuel prices (Announcement 2026-11).

Hypothetical example: An agent logs 4,000 business miles from January through June 2026 and 5,000 from July through December. The deduction is 4,000 × $0.725 = $2,900, plus 5,000 × $0.76 = $3,800, for $6,700 total, plus business parking and tolls.

Commuting is not deductible. Driving from home to your brokerage office is commuting. Driving from the office to a showing is business. If your home office is your principal place of business, Publication 463 says “your daily transportation between your home and other work locations is deductible.”

Home office

Under Publication 587, a home office can be your principal place of business if you use it regularly and exclusively for administrative or management work and you have no other fixed location where you do substantial administrative work. If you do most of your paperwork at a brokerage desk, a home office may not qualify.

Simplified method: $5 per square foot, up to 300 square feet, so a maximum of $1,500.
Regular method: the business percentage of actual home costs, such as rent or mortgage interest, utilities, and insurance.

A guest room that doubles as an office doesn’t qualify.

Deductions that don’t go on Schedule C

Self-employed health insurance is taken on Schedule 1, figured on Form 7206. You can’t take it for any month you were eligible for a subsidized plan through your employer or your spouse’s employer, “even if you didn’t actually participate.”
Retirement contributions to your own SEP-IRA or solo 401(k) are deducted on Schedule 1, not Schedule C, per Publication 560.
Half of your self-employment tax is an adjustment to income, not a business expense, per Publication 334.

If you lead a team

Commissions you pay team members are generally deductible. If you, not the brokerage, pay a team member $2,000 or more in 2026, you may need to send a Form 1099-NEC by January 31. Get a W-9 first.

What agents usually can’t deduct

Expense	Why it usually isn’t deductible
Commuting to your regular office	Personal travel (Publication 463)
Clothing you could wear anywhere	Everyday-wear clothing is personal
Gym or health club	Personal, and club dues are disallowed (Publication 529)
Personal share of phone or car	Only the business share counts
Sporting events, concerts, golf	Entertainment is disallowed
Political contributions	Specifically disallowed (Publication 529)

Tax forms agents receive in 2026

Form 1099-NEC. Brokerages report commissions on Form 1099-NEC. The threshold was $600 for payments made in 2025. Under the One Big Beautiful Bill Act, it rises to $2,000 for payments made after December 31, 2025 (IRS), and will be indexed for inflation after 2026 (Federal Register). The form is due to you by January 31.

Form 1099-K. Payment apps send a 1099-K only when payments for goods or services exceed $20,000 in more than 200 transactions (IRS).

A missing form doesn’t change what you owe: “Whether or not you receive a Form 1099-K, you must still report any income on your tax return” (IRS). The same is true for commissions with no 1099-NEC.

How to keep records that hold up

As a former IRS Revenue Agent, I can tell you a deduction is only as strong as the paper behind it. Keep receipts, invoices, statements, and Forms 1099, and run everything through a business account. Publication 583 says to “open a business checking account” separate from your personal one.

Mileage log. Publication 463 asks for timely records showing the amount (miles), the time (date), the place (where you went), and the business purpose (for example, “buyer showing, 123 Main St.”). A paper log or an app works, as long as you keep it as you go.

How long to keep records. The IRS says generally 3 years after you file, 6 years if you left out more than 25% of your gross income, and indefinitely if no return was filed. Keep vehicle and property records until the period ends for the year you sell them.

Year-end records checklist for real estate agents

Print this list. More checklists are on my resources page.

All Forms 1099-NEC and 1099-K, plus any corrected forms.
Your brokerage’s annual commission statement, showing gross commission, splits, and fees.
Business bank and credit card statements for all 12 months.
Receipts for MLS, association dues, TREC renewal, continuing education, and E&O.
Marketing, lead service, and software invoices.
Mileage log with dates, split at June 30 and July 1 for 2026.
Gift list with each recipient and amount.
Home office square footage and, for the regular method, home expense records.
Health insurance premiums and retirement contributions.
W-9s and payment totals for any team members you paid directly.

A Texas note: federal tax and franchise tax

Texas has no state personal income tax, so these deductions work on your federal income tax and self-employment tax.

If you operate through an LLC or S corporation, Texas franchise tax applies. Below the $2.65 million no-tax-due threshold for 2026 and 2027 reports, you owe no franchise tax but still file a Public Information Report or Ownership Information Report, generally due May 15. If you’re weighing an entity, read S corporation status for real estate agents first.

When to get help with agent taxes

Help is worth it when your 1099 and commission statement don’t match, when you’re choosing a car method, when you start a team, or when you’re considering an S corporation. If your books are behind, the signs in 5 signs your small business needs a bookkeeper may sound familiar.

My CPA services for real estate agents page covers common setups for agents and team leads.

Real Estate Agent Tax Deductions FAQ

Can real estate agents deduct their brokerage split?

Yes, if your Form 1099-NEC reports gross commission. If it reports only the net paid to you, don’t deduct the split again.

What is the 2026 mileage rate for real estate agents?

72.5 cents per business mile from January 1 through June 30, 2026, and 76 cents from July 1 through December 31, 2026.

How much can I deduct for closing gifts?

Up to $25 per person per year, not counting wrapping or shipping.

Can I deduct a home office if my brokerage gives me a desk?

Possibly, if you don’t do substantial administrative work at that desk and the home space is used regularly and only for business.

Do I have to report commission income if I didn’t get a 1099?

Yes. Business income is taxable whether or not a form arrives.

Tax help for San Antonio real estate agents

I prepare returns with a Schedule C starting at $1,200, which includes your Form 1040. I also offer monthly bookkeeping in QuickBooks Online from $500 per month, closed by the 15th of the following month, and tax planning sessions from $600. I’m a Texas-licensed CPA and former IRS Revenue Agent serving North San Antonio, Stone Oak and Sonterra, Bulverde, and all of San Antonio, in English and Spanish. Military families are welcome, service is secure and virtual, and you get a fixed fee in writing before work begins. No outcome is guaranteed. Learn more on my real estate agent CPA page.

Book a complimentary 15-minute fit call or call (210) 441-1293. Please don’t email tax returns, Social Security numbers, or IRS notices; I’ll send a secure SmartVault link.

Sources

Want a second look at your deductions?

Book a complimentary 15-minute fit call to see whether Jessica can help, or call (210) 441-1293.

Book a 15-Minute Fit Call Call (210) 441-1293

General Information Notice
This article provides general educational information and is not tax, legal, investment, or financial advice. Tax rules and their application may change and depend on specific facts. Reading this article or contacting the firm does not create an engagement, representation, or client relationship.

Author Information
Jessica Gonzalez, CPA is a Texas-licensed CPA with public-accounting experience, more than 12 years of federal service at DHS, and prior service as an IRS Revenue Agent. She helps clients with tax, bookkeeping, planning, and selected IRS matters.

Prior employment with the Internal Revenue Service does not imply endorsement by the IRS.

Real Estate Agent Tax Deductions and Records Checklist (2026)