Do you know what to include in your real estate agent tax deductions worksheet?
As a real estate agent, you incur many expenses throughout doing business. Keeping careful track of these expenses is crucial to maximize your eligible tax deductions and reduce your taxable income. With the complex tax code that is always changing, it is wise to consult with a licensed tax professional to ensure you deduct everything you are legally able to. This may allow you to keep more of your hard-earned commissions.
This comprehensive guide covers numerous categories of business expenses that might be available to real estate agents. Keep an ongoing tax deductions worksheet throughout the year, organized by category.
Here are some expenses that real estate agents should consider adding to their tax deductions worksheet and have reviewed by their licensed tax professional:
Disclaimer: This article is for informational purposes only and should not be used as a substitute for obtaining professional tax advice. Consult a tax professional regarding deduction eligibility based on your specific circ*mstances. Real Estate Agent Tax Deductions Worksheet: Items to Consider
Quick Reference Worksheet Table
| Category | Potential Deductions | Documentation |
|---|---|---|
| Advertising | Flyers, brochures, postcards, newspaper/magazine ads, TV/radio spots, digital ads, email marketing, social media marketing, promotional items, networking events | Receipts, invoices showing costs |
| Auto | Gas, mileage, tolls, parking, lease/financing payments, repairs, maintenance, registration, insurance | Mileage log, receipts |
| Travel | Airfare, lodging, rental cars, ride shares, meals, dry cleaning, baggage fees, tips | Receipts, per diem log |
| Commissions | Split commissions, franchise fees, MLS fees, withholdings | 1099s, statements |
| Communication | Cell phone, landline, internet, answering service, website fees | Bills showing business percentage |
| Education | Seminars, conferences, training, licensing, dues, subscriptions | Receipts, certificates |
| Equipment | Computers, phones, GPS, lockboxes, staging furniture, repairs | Receipts, depreciation schedule |
| Home Office | Mortgage interest, rent, utilities, repairs, insurance | Square footage, receipts |
| Insurance | E&O, liability, professional, cyber, umbrella | Premium statements |
| Legal & Professional | Tax prep, legal, accounting, consulting | Invoices |
| Office | Rent, supplies, furniture, cleaning, dues and fees | Lease, receipts |
| Startup Costs | Licenses, permits, lawyer fees, branding, website | Receipts from vendors |
| Subscriptions | MLS fees, listing database fees, magazines | Statements, invoices |
| Vehicle | Lease interest, parking, tolls, repairs, registration | Logs, receipts |
Advertising Expenses
Advertising is an essential part of promoting your services as a real estate agent. There are many real estate advertising costs you might be able to deduct, including traditional printed materials as well as an expanding array of digital marketing options. Be sure to track all your receipts and invoices for any advertising-related expenses. Options may include:
- Printed flyers, brochures, newsletters, postcards
- Newspaper, magazine, radio, and TV spots – keep records of media buy costs
- Direct mail campaigns – track printing and mailing costs
- Signage like lawn signs and billboards
- Digital ads on platforms like Google, Facebook, Instagram
- Email marketing services like Constant Contact or MailChimp
- Social media marketing expenses
- Branded promotional giveaways like pens and notepads
- Networking event and trade show booth fees
Auto Expenses
As a real estate agent, your automobile expenses can add up quickly. Some business-related auto expenses may be deductible. Be sure to keep a mileage log to track business miles driven. Potential options to deduct include:
- Gas costs for driving to showings and open houses
- Mileage deduction calculated at the prevailing IRS standard mileage rate
- Tolls incurred during business hours
- Parking fees for showings, marketing events, and office parking
- Car lease or financing payments, based on the percentage of business use
- Auto insurance premiums, pro-rated by percentage of business use
- Repairs and routine maintenance like oil changes
- Registration fees, licensing costs, washing
Travel Expenses
If you travel out of town for business, such as for real estate conferences or showings, the costs incurred may be deductible. Keep all related receipts and documentation. Travel expenses may include:
- Airfare or train tickets for business trips
- Lodging per diem rate when away on business
- Rental cars, ride shares, and public transit costs
- Meals per diem rate – require overnight stay
- Dry cleaning, laundry for extended trips
- Baggage fees and tips
Commission Expenses
As a real estate agent, you pay various fees and commissions as part of doing business. Be sure to track any deductions you can take from your gross commission, such as:
- Split commissions paid to cooperating agents
- Franchise fees paid per transaction
- MLS fees taken from your commissions
- Commission withholdings
Communication Expenses
Communication tools are essential for real estate agents. If used for business, these expenses may be deductible:
- Cell phone and wireless service plans – percentage used for business
- Landline phones, answering services, VOIP
- Fax line and internet services
- Website hosting, SEO services, CRM tools
Education Expenses
Ongoing education is crucial for a real estate professional. Consider the following:
- Seminars, conferences, training events
- Licensing exam fees
- Books, magazines, audio programs
- Membership dues for professional organizations
Equipment Expenses
As a real estate agent, you utilize various equipment that should be tracked:
- Computers, tablets, software, printers, scanners, cameras
- Phones, GPS, lockboxes, flashlights, cleaning tools
- Staging furniture, paint, decor – portion used for business
- Maintenance and repairs on electronic equipment
Home Office Deduction
Many real estate agents work from home. You may be able to deduct home office expenses like:
- Measure the percentage used exclusively for business
- Prorated mortgage interest, rent, insurance
- Repairs and maintenance
- Utilities including internet based on percentage
- Security system costs
- Home office furnishings
Insurance Expenses
Document insurance policies like:
- Errors and omissions (E&O) insurance
- General liability insurance
- Professional liability insurance
- Cyber liability insurance
- Umbrella insurance policy
Legal & Professional Fees
You may write off the cost of services like:
- Tax preparation fees
- Legal consultations
- Accounting and bookkeeping
Office Expenses
If you rent office space, keep track of related costs like:
- Rent
- Office supplies – paper, toner, pens
- Janitorial and cleaning services
- Furniture – desks, chairs, cabinets
- MLS and association dues
Start Up Costs
Those starting a real estate business should keep track of:
- Licenses, permits, fees
- Lawyers, accountants, consultants
- MLS fees, association dues
- Branding, website, business cards
Subscriptions & Fees
Ongoing costs such as:
- MLS subscription fees
- Real Estate Marketing Subscriptions
- Listing database access
- Industry magazines and journals
Vehicle Expenses
Beyond just mileage, keep track of:
- Business percentage of car lease interest
- Tolls, parking fees
- Repairs and routine maintenance
- Registration, licensing
Real Estate Agent Tax Deductions Worksheet Recap
As you can see, real estate agents may have numerous options for writing off eligible business expenses. Be sure to maintain thorough records and documentation. Consult with a tax professional to ensure you maximize deductions legally to reduce your taxable income. Keeping an organized tax deductions worksheet all year round can streamline the tax preparation process and help avoid headaches. The effort you put in now will pay off when tax time rolls around.
