Realtor tax organizer: commissions, brokerage costs, car and marketing

Most real estate agents are not employees of their brokerage for tax purposes. A statutory nonemployee is a worker the tax law treats as self-employed for income and employment taxes, and licensed real estate agents are one of the three categories (IRS Publication 15-A, Employer’s Supplemental Tax Guide). Two conditions apply: substantially all pay is tied to sales or other output rather than hours, and a written contract says the realtor is not treated as an employee (IRS Publication 15-A, Employer’s Supplemental Tax Guide).

A realtor who meets both runs a sole proprietorship, and Schedule C reports its profit or loss (IRS, About Schedule C (Form 1040)). A realtor paid a salary on a Form W-2 answers a different set of questions, so the organizer asks about status first. Appraisers paid on sales or output fall in the same category as real estate agents (IRS Publication 15-A, Employer’s Supplemental Tax Guide).

The general business questions, such as inventory and equipment, sit in the self-employed organizer. This one keeps to what is particular to selling real estate. A brokerage split is the share of each commission the brokerage keeps, and it shapes the income questions below.

For tax years beginning after 2025, the threshold for reporting many payments on information returns rose to $2,000 (Instructions for Forms 1099-MISC and 1099-NEC). A small referral fee from another broker may therefore arrive with no Form 1099-NEC at all. It is still income, so the organizer asks for every payer, not only the forms.

The best single record is the brokerage’s year-end commission statement. It lists each closing, the gross commission and the splits and fees taken out. Ask for it alongside each Form 1099-NEC, so the preparer can match the gross figure on the form to the net deposits in the bank.

Driving is a large cost for many realtors. For 2026, the business standard mileage rate is 72.5 cents a mile from January 1 to June 30, and 76 cents a mile from July 1 to December 31 (IRS, Standard mileage rates). A log by date keeps each mile in the right half of the year.

Not every trip counts. Driving between home and a regular place of work is personal commuting (IRS Publication 463, Travel, Gift, and Car Expenses). Getting from one workplace to another within your tax home area is a business transportation cost (IRS Publication 463, Travel, Gift, and Car Expenses). If a home office qualifies as your principal place of business, trips from home to another work location in the same business can be deducted (IRS Publication 463, Travel, Gift, and Car Expenses).

Publication 463 expects a written record kept in a log, diary, trip sheet or similar record, backed by documentary evidence (IRS Publication 463, Travel, Gift, and Car Expenses). A mileage app export works if it shows the date, the address and the purpose of each trip.

Closing gifts have a hard cap. You can deduct no more than $25 for business gifts given directly or indirectly to each person during the year (IRS Publication 463, Travel, Gift, and Car Expenses). Incidental costs such as engraving, packaging, insuring and mailing are generally left out of that $25 (IRS Publication 463, Travel, Gift, and Car Expenses). So the organizer asks for the gift list by recipient, with the cost of each item and its shipping kept apart.

Meals and entertainment follow different rules. Entertainment, such as tickets to a game, is no longer deductible (IRS Publication 463, Travel, Gift, and Car Expenses). You may still deduct 50% of a business meal if you are present and the meal is not lavish (IRS Publication 463, Travel, Gift, and Car Expenses). The organizer asks who attended and the business purpose, because the record must support each element (IRS Publication 463, Travel, Gift, and Car Expenses).

Marketing is usually the easiest block: listing photos, signs, brochures, online ads, the website, and lead or CRM subscriptions. Staging paid by the realtor belongs here too. Ask for the card and bank statements with each charge marked, rather than a list from memory.

Realtors who own rentals have a reason to track hours. Under the 2025 Schedule E instructions, a real estate professional is someone with more than half of their working services in real property businesses where they materially participate, and more than 750 hours in them (Instructions for Schedule E (Form 1040)). Brokerage is one of the real property trades listed (Instructions for Schedule E (Form 1040)).

Hours worked as an employee do not count unless you owned more than 5% of the employer (Instructions for Schedule E (Form 1040)). A commission-paid real estate agent under the statutory rules is not an employee, so brokerage hours can count. The organizer asks for an hours log, and the rentals themselves go in the rental property organizer.

• IRS Publication 15-A, Employer’s Supplemental Tax Guide: Licensed real estate agents are statutory nonemployees treated as self-employed when pay is tied to sales and a written contract says they are not employees.
• IRS Publication 463, Travel, Gift, and Car Expenses: Commuting versus business transportation, the home office exception, the $25 gift limit and incidental costs, the 50% meal rule, no entertainment deduction, and adequate records.
• IRS, Standard mileage rates: The 2026 business rate was 72.5 cents a mile from January 1 to June 30 and 76 cents a mile from July 1 to December 31.
• Instructions for Forms 1099-MISC and 1099-NEC: For tax years beginning after 2025, the reporting threshold for certain payments increased to $2,000.
• IRS, About Schedule C (Form 1040): Schedule C reports profit or loss from a sole proprietorship.
• Instructions for Schedule E (Form 1040): The real estate professional tests (more than half of services, more than 750 hours), brokerage as a real property trade, and the 5% owner rule for employees.