How Realtors Can Save on Taxes

Real estate agents and brokers are self-employed professionals with one of the richest sets of tax deductions available. Between mileage, marketing, licensing, and office expenses, a well-organized realtor can significantly reduce their tax bill, all legally. This guide covers every major deduction for realtors in the United States (IRS Schedule C) and Canada (CRA T2125).

Disclaimer: Tax laws change. Verify current rules with the IRS or CRA and consult a qualified tax professional before filing.

1. Mileage: The Realtor's Biggest Deduction

Realtors drive constantly: showing properties, meeting clients, attending closings, visiting offices, and going to inspections. Every one of those trips is a deductible business expense.

United States (IRS)

Use the standard mileage rate (67¢/mile for 2024; check irs.gov for the current year) or deduct actual vehicle expenses based on business-use percentage. The standard mileage method is simpler and often sufficient. Log every trip: date, destination, and business purpose.

Canada (CRA)

Deduct actual vehicle expenses multiplied by your business-use percentage. Track every business kilometre driven throughout the year, along with total annual kilometres. Maintain a contemporaneous logbook, as the CRA may ask for it in an audit.

Pro tip: TaxSort automatically logs GPS mileage in the background. By year end, you have a complete, audit-ready record of every business trip.

2. Home Office

If you regularly use a dedicated space in your home for business, such as reviewing listings, preparing contracts, or doing marketing, you can claim a home office deduction.

United States (IRS, Form 8829)

• Simplified method: $5 per square foot, up to 300 sq ft (max $1,500/year)
• Regular method: Actual home expenses × business-use percentage (more work, potentially larger deduction)

The space must be used regularly and exclusively for business.

Canada (CRA, T2125)

Deduct a proportional share of rent (or maintenance, property taxes, and insurance if you own) based on the square footage of the workspace relative to total home area. You cannot use the deduction to create or increase a business loss.

3. Marketing and Advertising

Marketing is one of the largest expenses for most realtors, and it is fully deductible.

• MLS listing fees
• Professional photography and videography for listings
• Drone photography
• Website hosting, domain registration, and design
• Social media advertising (Facebook, Instagram, Google Ads)
• Print flyers, postcards, and signage
• Branded merchandise (pens, notepads, calendars)
• Virtual tour software subscriptions

4. Professional Fees and Licensing

All fees required to maintain your real estate license and professional standing are deductible.

• Real estate license renewal fees
• Board and association dues (NAR, CREA, and local boards)
• Errors and Omissions (E&O) insurance premiums
• Desk fees paid to your broker
• MLS membership fees
• Transaction coordinator fees

5. Continuing Education

Courses, seminars, conferences, and designations required to maintain or improve your skills in real estate are deductible.

• Designation courses (ABR, CRS, GRI, SRS, etc.)
• Conference registration fees and related travel
• Books, online courses, and training subscriptions
• Coaching programs (business-related)

6. Client Entertainment and Meals

Business meals with clients, referral partners, or other agents are 50% deductible in both the US and Canada. Keep a receipt and note the business purpose and who attended.

Client appreciation gifts are deductible up to $25 per recipient per year under US rules. In Canada, gifts to clients may be fully deductible depending on the nature of the gift. Consult the CRA guidelines for specifics.

7. Phone and Internet

Your smartphone and internet connection are essential business tools. Deduct the business-use percentage of:

• Monthly mobile phone plan
• Home or office internet service
• Any real estate apps or CRM subscriptions (Follow Up Boss, kvCORE, etc.)

8. Office Supplies and Equipment

• Printer, ink, and paper
• Laptop or tablet (business-use percentage)
• Locking lockboxes
• Presentation materials and folders
• Digital signature software (DocuSign)

In the US, Section 179 may allow full first-year expensing of equipment. In Canada, claim capital cost allowance (CCA) at the appropriate class rate. Class 50 is for computers at 55% declining balance.

9. Staging and Open House Expenses

If you pay staging costs out of pocket to help sell a listing, those expenses are deductible. Open house supplies (refreshments, signage, printed materials) are also business expenses. Keep all receipts.

10. Bank Fees and Credit Card Fees

Monthly fees for a business bank account and annual fees for a business credit card are deductible. Interest on a business credit card used exclusively for business expenses is also deductible.

Quarterly Estimated Taxes

As a self-employed realtor, no employer withholds tax from your commission income. Stay ahead of tax bills:

• United States: Pay quarterly to the IRS if you expect to owe $1,000 or more: April 15, June 15, September 15, January 15.
• Canada: Pay CRA quarterly instalments if you owe more than $3,000 two years in a row: March 15, June 15, September 15, December 15.

The System That Pays for Itself

The biggest challenge for realtors isn't knowing what to deduct. The harder part is remembering to track every expense throughout a busy year. A receipt you don't capture is a deduction you lose.

TaxSort is designed for exactly this: snap every receipt the moment you get it, let GPS mileage tracking run in the background, and export a complete tax summary when you need it. For most realtors, the app pays for itself in the first month of tracking alone.