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5 Tax Deductions Every Real Estate Agent Should Know

August 24th, 2023 | 5 min. read

By Brian Paulson

Working in real estate takes a big investment of time and money. Plus, when it comes to expenses, it’s not always crystal clear whether they're deductible or not. In this industry where expenses add up quickly, understanding your expenses will help you deduct appropriately and avoid overpaying on your quarterly and year-end taxes.

At CSI Accounting & Payroll, we've worked with tax deductions for the real estate industry for over 50 years. Working with an accountant who's experienced in your field can save you more than you might realize.

However, if you're not ready for a change, you can bring these five critical tax deductions to your current accountant's attention.


5 Tax Deductions Every Real Estate Agent Should Know

1. Vehicle Mileage

How often are you driving between properties and appointments with potential clients? We’re guessing it’s quite a bit. Chat with your accountant to determine which of the following scenarios is right for you.

If you drive 10,000 miles or more per year for your real estate business, you will most likely benefit by taking the standard mileage deduction. To qualify for the standard deduction, the IRS requires a detailed log, including date, time, mileage, and purpose of the trip.

Lower mileage drivers may see a higher deduction from using the actual cost method

2. Marketing and Advertising

To be successful in real estate takes hustle, and most real estate professionals rely heavily on marketing and advertising to gain an advantage on the competition. These expenses can be deductions for your business. This can include digital and online advertising costs, such as:

  • Website design
  • Search engine optimization
  • Pay-per-click advertising
  • Video production

It’s important to track all of your marketing and advertising efforts - down to the printing of business cards - to maximize your deductions.

3. Home Office

If you have a dedicated work space in your home, you’re eligible for the home office deduction as a sole proprietorship. Similar to vehicle expenses, you have the option to choose between two methods: regular or simplified.

Many agents find the simplified method yields the highest returns; however, you should check with an accountant to see if the regular method, which requires tracking actual expenses, is the best method for your situation.

4. Fees and Insurance

Whether you are working for an independent broker or a national franchise, you have the option to deduct your desk fees. However, if you deduct brokerage fees, you waive your right to claim the home office deduction.

Other common annual fees are also deductible, such as your:

  • License
  • Professional members
  • Other dues

General business and other types of insurance are also considered deductible expenses.

5. Professional Development

The real estate industry is constantly changing and adapting to new technologies. To remain competitive, it’s vital for you to seek professional development. These classes or conferences, as well as the travel to attend them, are deductible expenses.

Maximize Your Deductions With an Experienced Real Estate Accountant

These are just a few ways to maximize deductions for your real estate business and to avoid overpayment of taxes. Between the five deductions that were touched on above, you should have a great starting place for claiming the tax deductions that will benefit your business the most.

However, an annual tax accountant can only help so much. Did you know that monthly accounting can benefit you year-round? Plus, a monthly accountant will know your business much better since they're in your books much more often - and they often have more extensive industry knowledge.

If monthly accounting interests you, why not consider CSI Accounting & Payroll? Our 50+ years of monthly accounting experience is proven by our 200+ positive Google reviews. 


Not ready to talk? That's okay! First, you can learn more about taxes by clicking the image below:

Read the complete guide to Small Business Taxes For Beginners

Brian Paulson

Brian began working at CSI in 1996, and he purchased the business in 2002. As Owner, his primary role is in the management and growth of the firm. Since 2002, the firm has more than quadrupled in size. In 2009, Brian started CSI’s payroll service to complement CSI’s accounting and tax services. Brian received his Bachelor’s degree from the University of North Dakota, with a double major in Accounting and Financial Management. He’s a member of both the National Society for Tax Professionals and the National Society for Accountants, and he serves on the board of directors for the Professional Association of Small Business Accountants, where he was once president. Brian also serves on the business advisory council for Opportunity Partners, an organization that helps people with disabilities find employment. He’s also contributed to several business books, including Six Steps to Small Business Success and The Lean Mean Business Machine. Fun Fact: To help put himself through college, he used student loans, delivered pizzas, and worked summers in a salmon processing plant in Alaska.