Top 10 Tax Tips Every

Real Estate Agent Should Know

By Joshua Jenson, CPA, aka JJ the CPA

 

Navigating the world of real estate is already a balancing act—managing listings, clients, closings, and marketing. But come tax season, many agents feel blindsided by the IRS. Whether you're a solo agent or part of a team, understanding your tax responsibilities and opportunities can keep more of your hard-earned commission in your pocket. Here are 10 practical, game-changing tax tips every Real estate agent should know. CLICK HERE if you are ready to learn more about this right now!

 

1. Treat Yourself Like a Business!

As an independent contractor, you're essentially running your own business. That means you're responsible for your taxes, insurance, and retirement. Set up a business bank account and track every dollar like a CEO would.

 

2. Save 25–30% of Every Commission:

The IRS doesn't take taxes from your checks—that's your job. Create a separate savings account and stash a percentage of every commission to avoid the year-end panic. Think of it as paying yourself peace of mind.

 

3. Don't Sleep on Deductions: 

You can deduct much more than just office supplies. Think lockboxes, MLS fees, your real estate license, continuing education, mileage, marketing costs—even client gifts (within limits). Keep solid records and categorize them monthly.

 

4. Mileage vs. Actual Expenses—Choose Wisely Driving clients around? 

That's deductible. But should you deduct mileage (70 cents per mile in 2025) or actual vehicle expenses? You can only pick one. Track both in your first year and compare to see which gives you a bigger break.

 

5. Home Office Deductions Count:

If you work from home, even if it's a corner, you can deduct a portion of your rent or mortgage, utilities, internet, and more—as long as the space is used exclusively for work. It doesn't need to be fancy but must be used regularly.

 

6. Quarterly Tax Payments Are a Must: 

Skip quarterly payments, and you may face penalties. The IRS expects self-employed people to pay taxes throughout the year. Schedule estimated tax payments for April, June, September, and January.

 

7. Hire a CPA Who Understands Real Estate:

Not all tax pros are created equal. You need someone who understands 1099 income, commission schedules, write-offs, and possibly S-Corp strategies. Find a tax partner who speaks your language.

 

8. Consider Incorporating (LLC as S-Corp):

Forming an LLC and electing S-Corp status might save you thousands in self-employment taxes as your income grows. But don't jump in without a tax professional—get their advice on when the move makes sense and how to manage your payroll. Consult tax adviser and legal counsel. 

 

Special Note on LLCs: When you create an LLC as a real estate agent, to avoid huge fines, you must immediately register your LLC with your state's real estate commission, board, or equivalent to ensure it is allowed. In Oklahoma, this is done with the Oklahoma Real Estate Commission (OREC) inside your license portal for OREC's and your Broker's approval. Consult with your Broker and OREC (or other state commission, board or equivalent) to ensure you follow all rules and regulations before you take any further action with your LLC.

 

9. Retirement Contributions Are a Tax Win:

Real estate agents often forget about retirement planning. SEP, Simple IRAs, Solo 401(k)s, and Traditional IRAs let you contribute pre-tax dollars, reduce your taxable income, and grow your wealth for the future.

 

10. Don't Wait Until April to "Figure It Out"

Tax planning is a year-round job. Stay organized with monthly bookkeeping, use apps to track expenses and mileage, and meet with your CPA at least once mid-year. Thoughtful tax planning is part of innovative business.

 

Round up!

Realtors®, you help clients make one of their life's most significant financial decisions. Why not do the same for yourself? Treating taxes like a tool—not a chore—you'll build a more profitable, sustainable real estate business.

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CLICK HERE - Get "Tax-Smart" now!