Keep this list of tax deductions handy if you work in real estate
The joy of selling someone their first (or second!) home, while rewarding, doesn’t come for free. Staging open houses, travelling to showings, and coordinating schedules takes time and resources — luckily real estate agents can turn many of these costs into savings in 2025.
Go through this list of tax deductions for real estate agents and see how many you can add to your tax return. Contrary to popular belief, it's not just the large expenses that qualify for deductions. Plenty of small, everyday expenses can also add up to substantial savings.
Deducting vehicle expenses in 2025
As a real estate agent, your car is more than just a form of transport — it's your lifeline for client meetings, property showings, and open houses. Like others who rely on a car for a living, you are allowed to deduct many of your vehicle-related expenses.
There are two ways to recuperate vehicle costs on your taxes in 2025.
Mileage (cost-per-mile)
If you’re self-employed as a real estate agent, you can track every business-related mile and then multiply it by the standard mileage rate for the tax year to get your deduction amount. For 2025, the standard mileage rate for business is 70 cents (up from 67 cents in 2024!). That means your mileage will be worth even more in this upcoming tax year.
Using the standard mileage rate is by far the easiest way to save on your driving expenses. Here are some drives you should be able to deduct:
- Client meetings
- Open house travel
- Staging and walkthrough trips
- Supply runs
- Travel to conferences and other professional development events
- Travel for training purposes (to attend seminars, workshops, or licensing exams)
The only business-related drives you cannot deduct are your daily commute between home and a primary work location — which could be a broker’s office where you rent a desk, your personal office, or a coworking space.
Deducting vehicle expenses using the actual expenses method
If you want to deduct more than just mileage in 2025, you can use the actual expenses method. You’ll still need to track drives, as well as gas receipts, and invoices for every other car-related expense, including:
- Oil changes, repairs, and maintenance
- Tires
- Insurance
- Registration fees
- Lease payments or depreciation (if you own the car)
You’ll then need to calculate the business percentage of your mileage and multiply it by your total costs to get the mileage deductions. As you can tell, this method is a lot more complex, which is why most self-employed real estate agents choose to just track mileage.
NOTE: If you choose the actual expenses method in your first year of using a car for business, you’ll need to use this method for that vehicle every year.
No matter which method you choose, be sure to track your work mileage. The easiest way to do that is with a mileage tracking app — you won’t need to update a log or note down details for each drive. An app like MileIQ tracks drives automatically, lets you classify drives as business or personal with a swipe, and generates mileage reports for you.
Travel expenses
Travel is a regular part of a real estate agent’s life, and you can deduct many travel-related expenses.
- Transportation: Airfare, train tickets, bus fares, and car rentals when you’re not using your own vehicle and claiming mileage.
- Lodging: Hotel or other accommodation expenses at your destination are deductible.
- Meals: You can deduct 50% of the cost of meals while traveling for business in 2025. Just ensure the meals are not extravagant unless there's a specific business reason. If you’re re-filing taxes for the 2021 or 2022 years, you may be able to deduct the full cost of business meals.
- Incidental expenses: These include tips, baggage, and parking fees related to your business travel.
As with any other expense you’re deducting, you’ll need to keep detailed records of your expenditures, including receipts.
Deducting office expenses in 2025
Whether you operate from a dedicated home office, a co-working space, or a traditional office setting, various office expenses are deductible.
Home office deduction
If your home is your primary workspace, you can claim a tax deduction on the square footage of your home space, at $5 per square foot (maximum you can deduct is 300 sq ft). Keep in mind that in order to qualify for this deduction, your home office needs to be a dedicated space, even if it’s a part of a larger room — working from the kitchen counter or the living room couch would not count.
You can also go the more complex route and deduct the business use portion of your:
- Rent or mortgage interest: Deduct a portion of your rent or mortgage interest based on the square footage of your home office relative to your home’s total square footage.
- Utilities: Deduct a portion of your electricity, gas, water, and trash collection bills.
- Homeowners or renters insurance: Deduct a portion of your insurance premiums.
- Property taxes: Deduct a portion of your property taxes.
- Repairs and maintenance: Deduct expenses for repairs and maintenance directly related to your home office space.
- Depreciation: If you own your home, you can deduct depreciation on the portion of your home used for business in 2025.
NOTE: If you’re choosing to deduct a business portion of your home office expenses, it’s best to consult with an accountant. It can be tricky to figure out exactly how much of your home electricity or another utility bill ends up being used for work. It’s especially important to
Note: To qualify for the Home Office Deduction, ensure the space is dedicated solely to business activities, used regularly for work rather than sporadically, and serves as your primary place of business where you conduct most of your tasks.
Deductible Office Supplies
Beyond the home office deduction, you can also deduct the cost of essential office supplies and equipment that keep your business running smoothly throughout the year, including:
- Computers and accessories: Laptops, desktops, printers, scanners, monitors, and other computer-related equipment.
- Phones and communication devices: Cell phones, landlines, headsets, and other devices used for business communication. It’s always easier to get a phone solely for business purposes if you don’t want to worry about calculating business use percentage on your personal cell phone.
- Office furniture: Desks, chairs, filing cabinets, bookshelves, and other furniture essential for your workspace.
- Software: Business-related software subscriptions and programs, including customer relationship management (CRM) software, accounting software, and productivity tools.
- Internet service: A portion of your internet bill can be deducted based on the business use percentage.
Co-working space fees
If you opt for a co-working space instead of a home office, the fees you pay for membership can often be deducted as a legitimate business expense. This includes the cost of your membership plan, access to shared amenities, and any additional services you utilize for your business.
Deductible insurance premiums for real estate agents
Safeguarding your business with appropriate insurance is essential, and many of these expenses are tax-deductible.
- Errors and Omissions insurance (E&O): E&O protects you from claims of negligence, errors, or omissions in your professional services. Whether it’s an accidental misrepresentation of property details or an oversight in contract preparation, this insurance covers legal defense costs and potential settlements. The premiums you pay for E&O insurance are typically deductible as a necessary business expense.
- Health insurance: If you’re not eligible for coverage through an employer or a spouse/domestic partner’s employer, you can deduct premiums paid for your health insurance, including premiums for your dependents.
- Business liability insurance: This insurance protects against financial losses due to third-party claims of bodily injury or property damage that might occur during your real estate activities. For instance, if a client has an accident during an open house, this insurance helps cover legal fees and potential settlements. The premiums for this insurance are generally tax-deductible.
Deductible commissions and fees in 2025
Various commissions and fees in real estate also have their tax implications.
- Splits with brokers: If you work under a broker, you likely have a commission-split agreement. This means that a portion of your earnings from transactions goes to your broker. These commission splits can generally be claimed as a business expense on your taxes.
- Desk fees: Many agents pay desk fees to access a brokerage’s office space and resources. These fees cover amenities like office space, administrative support, and marketing resources. Desk fees are considered necessary business expenses and are typically tax-deductible.
- Referral fees: You may pay fees to other agents or professionals who refer clients to you. These referral fees are generally deductible as a marketing or advertising expense.
Licenses and memberships
Staying licensed and actively involved in professional organizations is vital for a real estate agent’s career; many of these costs are tax-deductible.
- Real estate license renewal fees: The costs associated with renewing your license, including fees for mandatory continuing education.
- Membership dues for professional organizations: The dues you pay to organizations like the National Association of Realtors (NAR). However, note that any portion of the dues allocated to lobbying or political activities may not be deductible.
Education and training fees deduction
Investing in your education develops real estate skills and provides valuable tax deductions.
- Costs of attending real estate seminars and conferences: The expenses for registration fees, travel, and meals (subject to the 50% limitation) are generally tax-deductible.
- Online courses and continuing education classes: You can often offset the costs of educational resources, including tuition, materials, and related fees, against your taxable income.
- Certification renewal fees The renewal fees for specialized certifications, such as the Certified Residential Specialist (CRS) or the Accredited Buyer's Representative (ABR), along with any continuing education required to maintain these certifications, are generally eligible for tax deduction.
Professional Services
Seeking professional guidance is invaluable in the real estate industry, especially from specialists related to taxes and law.
Fees paid to accountants, tax advisors, and attorneys
- Accountants and tax advisors: Whether preparing your annual tax returns, providing tax planning advice, or assisting with bookkeeping and financial management, the fees paid to accountants and tax advisors are typically tax-deductible.
- Attorneys: Legal expertise is often required in real estate transactions, contract negotiations, and dispute resolution. The fees paid to attorneys for business-related legal services are generally tax-deductible.
Software
It’s hard to imagine doing any high-profile job without utilizing mobile or web apps, and the real estate industry is no different.
- Software subscriptions for accounting and CRM systems: These include tools like bookkeeping software, which helps you track income and expenses, generate financial reports, and manage invoices, as well as CRM systems that assist in managing leads, tracking client interactions, and streamlining marketing efforts.
- Mileage and expense tracking software: Keeping track of your mileage and business expenses can be a tedious task. However, using an app like MileIQ makes the process significantly more straightforward and the subscription fee is tax-deductible.
Marketing and advertising
You can offset the costs of print and digital advertising with tax deductions.
- Online advertising: Expenses for online advertising campaigns, including paying for things like a newsletter service or social media ads
- Print marketing materials: The cost of business cards, flyers, brochures, and other print marketing materials.
- Direct mail campaigns: Postage and printing costs for direct mail campaigns targeting potential clients.
- Website hosting and maintenance: The costs associated with website hosting, domain registration, and website maintenance.
- Social media advertising and management tools: The costs for social media advertising campaigns and any software or tools used to manage your social media presence can be deducted.
Client gifts
Showing appreciation through thoughtful gifts can help cultivate good business relationships, and the cost of these gifts may be tax-deductible as long as the gifts are directly related to your business and are not too extravagant.
- Deductible limit: The IRS sets an annual limit on the amount you can deduct for business gifts. Check the guidelines for your tax year beforehand.
- Incidental costs: In addition to the cost of the gift itself, you can deduct incidental expenses such as engraving, gift wrapping, and shipping.
Mastering tax deductions is key to keeping more of your earnings and fueling your business growth. With these deductions, you can cut your tax bill and reinvest in what matters.
Just remember to keep meticulous records, stay informed about any new tax regulations, and consider consulting a tax professional to ensure you’re maximizing every opportunity.
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Work in real estate? You can probably deduct more business expenses on your taxes than you think. Here’s your complete guide to tax deductions for real estate agents.
