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Business tax · Realtors
Most agents are independent contractors paid on 1099s, so they pay self-employment tax on every commission and must manage their own deductions and estimates. With the right structure and records, agents can save thousands each year.
Serving United States, Virginia, Washington, DC, Maryland.
What we handle
Under section 3508, licensed agents paid on commission under a written contractor agreement are treated as self-employed, so they owe self-employment tax on net commissions. Once income is steady, an S corporation with a reasonable salary can reduce that tax. Brokerage fees, desk fees, MLS and association dues, licensing and education, marketing, signs, photography, staging, client gifts within limits, phone and software are deductible, and vehicle costs need a contemporaneous mileage log under section 274(d).
Agents with uneven income should make quarterly estimated payments and fund a solo 401(k) or SEP in good years. Agents who also buy rental property may qualify as real estate professionals, because brokerage counts as a real property trade or business, letting rental losses offset commissions when the hour tests are met.
Speak with an advisorWhere we help
Qualified real estate agents are treated as non-employees for federal tax purposes.
Vehicle and certain other deductions require written, contemporaneous records.
Brokerage counts toward real estate professional status for agents who invest.
S corporation owners must take reasonable salary before distributions.
Our approach
A senior advisor reviews your facts and documents.
Scope, fees and timeline in an engagement letter.
Returns, elections and forms prepared and reviewed.
IRS contact and planning all year.
Questions
If your question isn't here, call (703) 880-8412 and you'll reach a person.
Often once net commissions are consistently well above a reasonable salary for the work. We compare the payroll tax savings with the added costs first.
Yes, for business driving, using the standard mileage rate or actual costs, with a mileage log kept as you go.
Business gifts are limited to $25 per person per year, but many marketing and event costs are fully deductible.
If you qualify as a real estate professional and materially participate, rental losses can offset commission income.
Latest updates
Authorized representatives can now make balance-due, amended return, extension, proposed assessment and federal tax deposit payments for business clients online. Appropriate authorization for the client and tax matter is required.
Source: IRS (IR-2026-134)
For 2027 the joint-return standard deduction rises to $33,200, the estate tax basic exclusion to $15,480,000, the annual gift exclusion to $20,000 and the Section 179 expensing limit to $2,640,000. Our advisors recommend revisiting year-end gifting and equipment purchase plans with these figures in mind.
Source: IRS (IR-2026-133)
All 6,576 nominated census tracts, including 2,594 rural tracts eligible for enhanced benefits, become Opportunity Zones on January 1, 2027 for ten years. Investors with capital gains should review the new map before committing funds.
Source: IRS (IR-2026-132)
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