Tax Tips for Real Estate Agents: What You Need to Know About 1099 Income
By AI Tax Consulting PLLC | Tax Services for Realtors in Stafford & Fredericksburg
As a real estate agent, you’re likely receiving a Form 1099-NEC instead of a W-2. That makes you self-employed in the eyes of the IRS — and with that comes a whole different set of tax rules.
If you’re not planning ahead, it’s easy to fall behind. Below are key tax tips tailored for real estate professionals to help you maximize deductions, avoid penalties, and take control of your finances.
🧾 1. You’re a Business Owner — Even If You Work for a Broker
Just because you hang your license with a brokerage doesn’t mean you’re an employee. As a 1099 earner:
- You must report income and expenses on Schedule C
- You pay self-employment tax (15.3%) in addition to federal and state income taxes
- You’re responsible for your own quarterly estimated tax payments
Understanding this early can help you plan better and avoid tax-time surprises.
💸 2. Know What Expenses You Can Deduct
Real estate agents have a wide range of legitimate business deductions — if they’re tracked and documented correctly. Some common ones include:
- MLS dues and real estate licensing fees
- Marketing and advertising (flyers, signs, social media ads)
- Website and CRM subscriptions
- Continuing education courses
- Office supplies and postage
- Business-related meals and entertainment (50% deductible)
- Home office (if used exclusively for work)
- Cell phone and internet (business portion only)
- Vehicle mileage (keep a log or use a tracking app)
💡 Tip: The IRS looks for proper documentation. A mileage app or clean bookkeeping software can help you avoid audits later.
📆 3. Don’t Skip Estimated Taxes
The IRS expects self-employed individuals to pay taxes throughout the year. As a real estate agent, that means sending in quarterly estimated payments — especially if you had a great sales year.
Deadlines:
- April 15
- June 15
- September 15
- January 15 (following year)
Missed or underpaid estimates can trigger penalties — even if you file your return on time.
💬 4. Form 1099-NEC Isn’t the Only Thing You Might Receive
In some cases, you might also get:
- Form 1099-K (if your commission was paid through a third-party processor like PayPal or a brokerage payout app)
- Form 1098 (if you own investment property)
Keep your eye out for all IRS forms — and don’t rely only on what the broker sends. If you earned income, it’s taxable whether a form was issued or not.
⚠️ 5. Don’t Fall for Social Media Tax Advice
It’s tempting to follow trendy TikTok tax advice or try to “write everything off,” but real estate agents are frequently audited for overdoing it. Common red flags include:
- Excessive vehicle or home office deductions
- Personal expenses passed off as business
- Missing income (not reported if no 1099 was issued)
Tax planning, not shortcuts, leads to real savings.
Final Thoughts: Your Tax Return Should Reflect Your Business
As a real estate professional, you juggle listings, closings, and client relationships — let a trusted CPA handle the tax side. At AI Tax Consulting PLLC, we specialize in tax prep for real estate agents, brokers, and multi-1099 professionals.
📍 Based in Stafford & Fredericksburg, VA
✅ Real experience with realtors
🔒 Secure online portal and year-round support
👉 Create your portal account today or call (703) 501-7090 to get started.
