Real Estate Agent Taxes, Explained
Most agents are 1099 independent contractors paid in lumpy commission checks with nothing withheld. That makes proactive tax planning, deductions plus quarterly estimates, essential to avoid a brutal April.
Mileage and vehicle costs add up fast
Showings, open houses, inspections, and closings mean serious driving. At $0.76/mi (Jul–Dec 2026; $0.725 Jan–Jun) the standard mileage deduction is often an agent's largest write-off. Keep a contemporaneous log; Gigaverse tracks business miles automatically so the deduction holds up.
Marketing, MLS, and license deductions
Agents have deep, agent-specific deductions: MLS dues, license renewal, E&O insurance, brokerage desk fees, signage, photography, staging, client gifts (within limits), lead-gen subscriptions, and CRM software. These are real Schedule C expenses that meaningfully lower taxable commission income.
Commission income and quarterly estimates
Commission arrives unevenly and untaxed. You owe 15.3% self-employment tax on 92.35% of net profit plus income tax, with estimated payments due roughly Apr/Jun/Sep/Jan. Setting aside a slice of each commission check as it lands prevents a quarterly scramble.
Watch for the S-corp question
At higher, steady commission income, some agents elect S-corp status to reduce self-employment tax, but it adds payroll and admin and isn't worth it for everyone. It's a per-situation decision for a tax professional, not a default.
Frequently asked
What can real estate agents deduct?+
Mileage at $0.76/mi (Jul–Dec 2026; $0.725 Jan–Jun), MLS and license fees, E&O insurance, desk/brokerage fees, marketing, photography, staging, CRM software, and client gifts within IRS limits, all on Schedule C. Your deduction depends on your activity.
How do agents handle taxes on commission?+
No one withholds from commission, so the IRS expects quarterly estimated payments and you owe self-employment tax plus income tax. Setting aside ~25-30% of each check (adjusted for deductions) is a common starting point; an estimate from your numbers is more precise.
Should a real estate agent form an S-corp?+
Sometimes, at higher, stable income an S-corp can reduce self-employment tax, but it adds payroll costs and complexity. It's a case-by-case decision; consult a tax professional.
Let Gigaverse handle it automatically
Auto-tracked deductions Quarterly estimates Portable IRA
Free · Takes 10 seconds · First 1,000 in line get launch perks
Educational estimates only, not tax, legal, or investment advice. Gigaverse is not a bank; brokerage services via a FINRA/SIPC-member broker-dealer. Outcomes depend on your individual circumstances.