The Tax Deductions Realtors Need in 2025

We all know that tax season comes around every year, and yet, it sneaks up on us out of nowhere! For Realtors, you’re doing double duty during tax season as you help not only yourself but your clients, as well.

Since you’re considered self-employed, taxes are a bit more complicated than for a standard worker. But don’t worry; this handy guide will help you stay stress-free as you file!

Important Tax Dates for Realtors

• You can file between January 27 and April 15, 2025.
• You can file for an extension by April 15, 2025.
• Taxes with an extension must be completed no later than October 15, 2025.
• Refunds have no guaranteed timelines, but you may see your refund more quickly if you file electronically and use direct deposit. If you received Earned Income Tax Credit or Additional Child Tax Credit, the law states that your refund cannot be processed until at least the middle of February.

• April 15
• June 15
• September 15
• January 15 (of the following year)

You'll use Form 1040 to report your income—this is the standard individual tax return for most taxpayers. Along with that, you'll need to complete Schedule C, which details your business income and expenses. This form helps determine your net profit or loss from your real estate work.

Keeping detailed records of your earnings and expenses throughout the year is crucial. Your income includes commissions, fees, and any other payments related to your real estate business.

2025 Gift Tax Update

Here’s something your clients will want to know for 2025: The IRS is allowing individuals to gift or pass on up to $13.99 million ($27.98 million for married couples) without paying estate taxes. Plus, they can gift up to $19,000 each year without needing to report it.

But these high limits will drop in 2026 unless Congress makes a change. If your clients are thinking about transferring real estate or making large gifts, 2025 is the time to do it tax-free. For instance, they could pass along a $3 million home to their heirs without estate taxes—if the rest of the estate is under the limit.

IRS Free File:

In 2024, the IRS launched Free File, a program for eligible taxpayers to file federal taxes online at no cost. This safe and simple tool uses guided software to make filing easy. You must make less than $84,000 a year to use Free File. Click here to learn more!

IRS Direct File

Opening on January 27, 2025, Direct File allows taxpayers in 25 participating states to file their federal and state taxes directly online. If you lived and worked in one of these states throughout 2024, you’re eligible to use this convenient tool. New for 2025, Direct File lets you import W-2 wage information, saving you time during the filing process. The program is available until October 15, 2025. Click here to learn more!

Participating States: Alaska, Arizona, California, Connecticut, Florida, Idaho, Illinois, Kansas, Maine, Maryland, Massachusetts, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, Oregon, Pennsylvania, South Dakota, Tennessee, Texas, Washington, Wisconsin, and Wyoming.

Inflation and 2024 Income Tax Brackets

Due to inflation, you may see increased prices for your cost of living, or you may have clients concerned about it as they try to buy a home. Luckily, the IRS takes inflation into account, and tax brackets are adjusted to reflect the current state of the economy.

Speaking of tax brackets, here’s what they look like for 2024 filing:

Itemized deductions include health insurance, medical bills, Health Savings Account (HSA) contributions, energy-saving home improvement, state and local taxes, student loan interest, educational bills like tuition, mortgage interest, electric car credit, donations to non-profits, and business expenses.

Business Expenses for Realtors

It’s crucial to remember that even if you work with a real estate firm, real estate agents are considered self-employed when it comes to taxes. It is best for you to use itemized deductions following the guidelines of the Path Act and we highly encourage you to work with a professional to maximize those results.

While there are limits to deductions, there are many write-offs allowed:

• Continuing Education: Attending conferences and trainings helps you to stay ahead of the curve as a Realtor. Make sure you’re deducting things like registration fees and course materials.
  
  
• Home Office: If your home office is your primary place of business, then you may be able to make deductions on the costs of items used in it, such as your desk, writing supplies, printing supplies, etc.
  
  
• Marketing Costs: Growing your clientele includes marketing yourself. Whether you’re doing that through ads on social media, hosting a podcast, or going old school with print advertising, those expenses can typically be written off.
  
  
• Closing/Partner Gifts: Showing your clients and partners you value them is a big part of your job, and a great way to do that is with a gift! You can deduct up to $25 from the gifts you give.
  
  
• Auto Maintenance: Working with home buyers and sellers means driving (and driving means auto expenses). So, you have two options: standard auto deduction or standard mileage deduction. Find out whether it would benefit you more to write off your mileage or your expenses and go from there!
  
  
• Licensure: You know the importance of keeping your license up-to-date and paying your memberships on time. Check with your accountant to see what can be deducted from your taxes.
  
  
• Productivity Software: Any software or app you need to run your business is fully tax-deductible.
  
  
• Travel: When you travel for education, training, or events, you might be able to write it off as a business expense.
  
  
• Commissions: Did you know the commissions you pay out to people on your team are deductible? Work with your tax professional to see how that can be itemized for you!
  
  
• Food: Taking a client out to dinner is a business expense and so is eating while traveling. Up to 50% of the cost of food can be deducted.
  
  
• Desk Fees: If you aren’t using a home office and are instead working in an actual office, you can write these fees off.
  

Things to Remember

We can’t stress enough how important it is to follow IRS Guidelines when it comes to business expenses and to always work with a tax professional for the best results. There are limits to what can be deducted from your taxes, and a professional will know the ins and outs.

As a real estate professional, the tax records you keep are important. The more information you can provide to your accountant, the better it will be for you and your business. Remember, this article is just a guideline, and Churchill Mortgage does not provide tax advice. What we can provide for real estate agents is partnerships that are rooted in helping your clients have the best home buying experience possible. Reach out to learn more!

The information contained herein is general in nature and based on authorities that are subject to change. Churchill Mortgage guarantees neither the accuracy nor completeness of any information and is not responsible for any errors or omissions, or for results obtained by others as a result of reliance upon such information. Churchill Mortgage assumes no obligation to inform the reader of any changes in tax laws or other factors that could affect information contained herein. This publication does not, and is not intended to, provide legal, tax or accounting advice, and readers should consult their tax advisors concerning the application of tax laws to their particular situations.