How much tax do real estate agents pay?

As a 1099 independent contractor, you owe 15.3% self-employment tax on 92.35% of net commission income plus income tax. After deducting mileage, marketing, and fees, many agents set aside 25–30% of net earnings.

What can real estate agents write off?

Vehicle mileage (70¢/mile in 2025), MLS and NAR dues, license renewals, E&O insurance, marketing and signage, staging, client gifts (up to $25/person), a home office, and CRM software. Driving between showings is a major deduction.

Should a real estate agent form an S-corp?

Often worth considering once net commission income is reliably above roughly $80,000–$100,000. An S-corp lets you take part of income as distributions that avoid the 15.3% SE tax, but adds payroll and filing costs. Confirm a reasonable salary with a CPA.

Can real estate agents deduct car expenses?

Yes. Driving to showings, closings, and client meetings is deductible at 70¢/mile for 2025, or via actual vehicle expenses. Keep a mileage log; commuting from home to a regular office isn't deductible, but trips to properties are.

Self-Employment Tax Calculator for Real Estate Agents (2025)

How much tax does a self-employed real estate agent pay? A real estate agent earning $90,000 with about $25,000 in business expenses owes roughly $14,305 in total federal tax for 2025 — a 15.3% self-employment tax plus federal income tax — or about $3,576 per quarter. A common rule of thumb is to set aside 25–30% of net income for taxes. Use the calculator below for your own numbers and state.

Most real estate agents are independent contractors paid on commission with no withholding. This calculator estimates your self-employment tax and quarterly payments, and flags the vehicle, marketing, and license deductions realtors most often overlook.

Annual gross income (before expenses)

Total business expenses (incl. deductions below)

State

This tool provides estimates for educational purposes only and is not tax advice. Tax rules change; figures are based on 2025 federal rules. Consult a tax professional for your specific situation.

Deductions Real Estate Agents often miss

Agent income is commission-based and lumpy ($40,000–$150,000+). A big closing month can create a large tax bill — quarterly planning is essential.

Vehicle & mileage: Driving to showings, open houses, and client meetings at 70¢/mile (2025), or actual vehicle expenses.
Marketing & advertising: Listing photos, signage, online ads, mailers, business cards, and your website.
License, dues & MLS fees: License renewals, board dues, MLS access, and brokerage desk fees are deductible.
Client gifts & staging: Closing gifts (up to $25/client limit), staging costs, and open house supplies.
Continuing education: Required CE courses, certifications, and industry conferences.

Common tax mistakes for real estate agents

Not making quarterly payments after a big commission check.
Under-tracking business mileage, often the largest deduction.
Forgetting MLS, board, and desk fees.
Mixing personal and business vehicle use without records.

How self-employment tax works

As a self-employed real estate agent, you pay a 15.3% self-employment tax (12.4% Social Security + 2.9% Medicare) on 92.35% of your net profit, plus federal and state income tax. A common rule of thumb is to set aside 25–30% of your net income for taxes.

Quarterly estimated tax deadlines (2025)

If you expect to owe $1,000 or more, the IRS requires quarterly estimated payments. For 2025 income the deadlines are: April 15, 2025; June 16, 2025; September 15, 2025; and January 15, 2026. Missing them can trigger underpayment penalties. The calculator above estimates your quarterly amount.

Frequently asked questions

How much tax do real estate agents pay?: As a 1099 independent contractor, you owe 15.3% self-employment tax on 92.35% of net commission income plus income tax. After deducting mileage, marketing, and fees, many agents set aside 25–30% of net earnings.
What can real estate agents write off?: Vehicle mileage (70¢/mile in 2025), MLS and NAR dues, license renewals, E&O insurance, marketing and signage, staging, client gifts (up to $25/person), a home office, and CRM software. Driving between showings is a major deduction.
Should a real estate agent form an S-corp?: Often worth considering once net commission income is reliably above roughly $80,000–$100,000. An S-corp lets you take part of income as distributions that avoid the 15.3% SE tax, but adds payroll and filing costs. Confirm a reasonable salary with a CPA.
Can real estate agents deduct car expenses?: Yes. Driving to showings, closings, and client meetings is deductible at 70¢/mile for 2025, or via actual vehicle expenses. Keep a mileage log; commuting from home to a regular office isn't deductible, but trips to properties are.