Real Estate Agent Checklist for Taxes

Real estate agents have myriad tax deductions due to being self-employed.
Real estate agents have myriad tax deductions due to being self-employed. (Image: Jupiterimages/Comstock/Getty Images)

The IRS designates a real estate agent as a self-employed individual. That means paying self-employment taxes if you happen to be employed in this career. However, despite having to calculate loss or profit from your real estate business, most of your tax checklist involves the myriad deductions you can take.

Schedule C and C-EZ Forms

Because a real estate agent is considered self-employed, you need to fill out a Schedule C form — "Profit or Loss From Business" — if you made more than $400 in a tax year (see Resources). You can also fill out a Schedule C-EZ form — "Net Profit from Business — if you managed to have expenses that total less than $5,000 (see Resources). Calculate your income or loss of income on these forms to determine what you have to pay in Social Security and Medicare taxes.

Schedule SE Form

Fill out a Schedule SE form — "Self-Employment Tax" — to report the amount of Social Security and Medicare taxes you need to pay (see Resources). Read the first page of the form and determine if you need to fill out the short-form SE form or the long form. Generally, only ministers or members of religious orders use the short form.

Deduction Rules

Check the IRS code, particularly Section 162, which tells you the reasonable number of deductions you can take when working as a real estate agent. Basically, a deduction for this career is necessary to keep your real estate business running efficiently. A 2011 real estate tax-deduction article by Stephen Fishman on says that a single real-estate agent making $100,000 can save up to 50 cents for every dollar deducted on income, state and self-employment taxes.


Talk to your certified public accountant about what you want to deduct, because you might find a few that can’t be used. Anything considered a personal expense doesn’t fall under the category of a tax deduction. This might include a cell phone if you only use it for personal use; however, if you use it for business purposes, you can deduct that cost. In a different scenario, you can also deduct just the business side use of the cell phone, which would involve deducting half the price of the phone.

Office Equipment Deductions

Look into the IRS code, particularly Section 179, about office equipment deductions. You can easily deduct any office equipment, as it pertains to the running of your real estate agent business. After one year, the cost of some of your office equipment can be reduced by half using the process of bonus depreciation. Bonus depreciation only applies to specialized items such as certain types of property, water, utilities or — in the case of office equipment — off-the-shelf computer software.

Other Possible Deductions

Ask your CPA about other deductions you can potentially take. Advertising costs are a vital deduction, which can include newspaper or online advertising, business card costs or any other promotional materials. You can even deduct up to $25 off of any business gifts you receive while working in real estate. Car maintenance is also a big deduction as part of your travel expenses. Plus, professional dues and fees can be written off, especially ones pertaining to your real estate licenses.

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