This article is general guidance, not tax advice. Confirm with your CPA before claiming any deduction on your return.
Vehicle and mileage
Usually the single biggest deduction for an active agent. You have two methods:
- Standard mileage rate — multiply business miles by the IRS standard rate for the year. Simpler. Most agents use this.
- Actual expenses — track all vehicle expenses (gas, insurance, maintenance, depreciation, lease payments) and deduct the business-use percentage.
For most agents, the standard mileage rate produces a similar or larger deduction with much less work. Track every business mile — showings, listings, open houses, closings, broker office visits, networking events, continuing education classes.
What doesn't count: commuting from home to your primary office. What does count: most other driving, especially if you operate from a home office.
Home office
If you have a dedicated space in your home used exclusively and regularly for business, you can deduct a portion of:
- Mortgage interest or rent (the business-use percentage)
- Utilities — electric, water, internet, trash
- Homeowners insurance
- HOA fees
- Home maintenance and repairs (allocated)
- Depreciation on the home (if you own)
Two calculation methods exist — simplified ($5 per square foot, up to 300 sq ft) and actual expense. Most agents come out ahead with actual expense. See our home office deduction guide for the longer treatment.
Marketing and lead generation
- Zillow, Realtor.com, and other lead-generation platforms
- Facebook, Instagram, and Google ads
- Direct mail, postcards, and flyers
- Yard signs, rider signs, and installation costs
- Listing photography and videography
- 3D virtual tours (Matterport, etc.)
- Listing brochures and feature sheets
- Branded merchandise and giveaways
- Website hosting and design
- Search engine optimization services
- Email marketing platforms (Mailchimp, Constant Contact, etc.)
- Sponsorships of local events
Professional fees and dues
- MLS dues and access fees
- Realtor association memberships (NAR, FAR, local boards)
- Real estate license renewal fees
- State and broker fees
- E&O (errors and omissions) insurance
- General liability insurance
- Lockbox and key fees
- Designation fees (CRS, ABR, GRI, etc.)
Education and training
- Continuing education courses required for license renewal
- Optional designations and certifications
- Real estate coaching programs
- Mastermind groups and paid networking
- Conferences and conventions (registration, travel, lodging)
- Real estate books and audio programs
- Subscriptions to industry publications
Office and technology
- CRM software (Follow Up Boss, kvCORE, Sierra Interactive, etc.)
- Transaction management software (Dotloop, SkySlope)
- DocuSign and electronic signature tools
- Cloud storage (Dropbox, Google Workspace, OneDrive)
- Phone — business line or business-use percentage of personal line
- Computer, tablet, monitor (capitalized over time or expensed under de minimis safe harbor)
- Printer, scanner, and supplies
- Office furniture for home office
- Office supplies — pens, paper, folders, binders
Client-related expenses
- Closing gifts (subject to the IRS $25-per-recipient business gift limit)
- Client meals — currently 50% deductible
- Coffee, water, and snacks for client meetings
- Open house refreshments and supplies
- Staging consultations and minor staging items
- Inspection fees you pay on behalf of clients (recoverable; track carefully)
Travel
- Out-of-town conference travel (airfare, hotel, transportation)
- Meals during business travel (50% deductible)
- Property tours and out-of-area showings
- Mileage for travel between properties
Personal vacations don't qualify, even if you "checked out the market" while there. The primary purpose has to be business.
Brokerage splits and fees
Even though your brokerage takes its split before you ever see the money, the gross commission is still your income and the split is your expense. Track:
- Brokerage commission splits
- Desk fees and monthly office fees
- Transaction coordinator fees
- Errors & omissions insurance assessed by the brokerage
- Technology and CRM fees charged by the brokerage
- Referral fees paid to other agents
If you record only net commission (what hit your bank), you'll lose the deduction for everything the brokerage withheld.
Self-employment-specific deductions
These don't reduce your business income directly but reduce your overall taxable income:
- Self-employment tax deduction — half of your self-employment tax is deductible
- Self-employed health insurance — premiums you pay for yourself, spouse, and dependents
- Retirement contributions — SEP-IRA, SIMPLE IRA, or Solo 401(k) contributions can be substantial
- HSA contributions — if you have a qualifying high-deductible health plan
Retirement contributions in particular are how high-earning agents move significant taxable income off the table. A Solo 401(k) can allow tens of thousands in deductible contributions depending on your net income — worth a conversation with your CPA before year-end.
Bank and processing fees
- Business bank account fees
- Credit card annual fees and interest on business cards
- Payment processing fees if you accept card payments
- Wire transfer fees
Less obvious deductions agents often miss
- Drone operation — if you fly your own for listing photography, equipment and FAA fees
- Showing service fees (ShowingTime, etc.)
- Headshots — professional photography for marketing
- Wardrobe — generally NOT deductible unless it's a uniform with brokerage logo; regular business clothes don't qualify
- Babysitting during showings — generally not deductible (personal expense)
- Background music subscriptions for open houses
- Postage and shipping for client communications
- Newspaper and listing-syndication fees
- Notary fees and supplies if you're a commissioned notary
- Real estate market data subscriptions (CoreLogic, etc.)
Watch out for these common mistakes
1. Deducting clothing
The IRS doesn't allow deductions for clothing that can be worn outside of work, even if you wear it exclusively for showings. Branded uniforms with a logo are an exception.
2. Deducting commuting miles
Driving from home to a regular office is commuting, not business. If your home is your principal place of business (which is true for many agents), most other driving qualifies — but pure commuting doesn't.
3. Deducting personal phone fully
If your phone is mixed personal and business, deduct the business-use percentage (a defensible estimate like 70% is fine if you can support it). Deducting 100% of a phone you also use personally invites trouble in an audit.
4. Deducting personal meals
Meals are deductible (at 50%) only when they have a clear business purpose — meeting with a client, prospect, or referral partner. Eating lunch alone at your desk isn't a business meal.
5. Not tracking small expenses
The $12 here and $30 there adds up. Agents who track everything end up with $5,000–$15,000 more in deductions than agents who only track the big stuff.
How to capture all of this
Three habits handle 90% of deduction tracking:
- A dedicated business credit card for every business expense — even $4 at Starbucks for a coffee meeting
- A mileage tracking app running in the background of your phone
- Bookkeeping software with bank feeds categorizing transactions automatically (or a bookkeeper doing it for you)
Without these, you're relying on memory and willpower — both of which fail under tax-season pressure.
Frequently asked questions
If you're already licensed, continuing education to maintain or improve your existing skills is deductible. The initial coursework to get your first real estate license generally is not — the IRS treats it as preparing you for a new profession.
Yes, if you pay for staging on a listing, it's a marketing expense. If the seller pays, you can't deduct it.
Business gifts to clients are deductible up to $25 per recipient per year. Closing gifts above $25 are still deductible up to that limit — the excess isn't.
The IRS requires receipts or equivalent documentation for expenses, especially anything over $75 and any travel, meals, or vehicle expense. Bank and credit card statements aren't sufficient by themselves — keep receipts in a digital or physical file.
How we help
SoFlo360 supports Florida real estate agents with bookkeeping built for commission income — full expense capture, mileage integration, year-end packages your CPA will thank you for. Spanish-friendly support available.