Real Estate Agent Expenses and Mileage Tracking for Taxes

Most solo agents are paid as independent contractors, so business costs come out of your own pocket. Tracking those costs through the year makes tax time faster, and it's how you find out whether your business actually makes money.

This guide covers the expense categories agents commonly track, how the IRS standard mileage rate works for 2026, and what a usable mileage log looks like.

This isn't tax advice. It's general information based on IRS publications. Tax rules change and depend on your situation, so confirm what you can deduct, and how, with a qualified tax professional.

The basic test: ordinary and necessary

The IRS says a business expense can be deductible if it's ordinary (common and accepted in your trade) and necessary (helpful and appropriate for your business). An expense doesn't have to be required to count as necessary. That definition comes from IRS Publication 463, which covers travel, gift, and car expenses.

Self-employed agents generally report business income and expenses on Schedule C (Form 1040). Whether that applies to you depends on how your brokerage pays you, so ask your tax professional.

Common expense categories for real estate agents

These are categories agents commonly track. Whether a specific expense is deductible, and how much of it, depends on your facts.

• MLS, board, and association dues. Recurring fees you pay to access the MLS and stay a member of your board.
• License renewal and continuing education. State license fees and required CE courses.
• E&O insurance. Errors and omissions coverage, if you pay for it rather than your brokerage.
• Brokerage fees. Monthly desk fees, technology fees, and per-transaction fees you pay your broker. Keep these separate from your commission split so you can see what your brokerage really costs you.
• Marketing and advertising. Signs, riders, lockboxes, listing photography, online ads, postcards, print materials, and your website.
• Software and subscriptions. CRM, e-signature, transaction management, and similar tools.
• Phone and internet. Usually only the business-use share is deductible if you also use them personally.
• Office supplies and equipment. Paper, printer ink, and equipment like a laptop or printer. Larger purchases may have to be depreciated instead of deducted all at once.
• Home office. If part of your home is used regularly and only for business, you may qualify. The rules are in IRS Publication 587.
• Client gifts. Pub. 463 limits the deduction for business gifts to $25 per person per year. Incidental costs like wrapping and shipping generally don't count toward that limit.
• Business meals. Generally 50% deductible when you or an employee is present and the meal isn't lavish or extravagant (Pub. 463).
• Entertainment. Generally not deductible. Under Pub. 463, sporting event tickets, concerts, and club dues don't qualify, even with a client.
• Vehicle costs. Covered in the next section.

For each expense, record the date, vendor, amount, category, and business purpose, and keep the receipt.

Vehicle expenses: standard mileage rate vs. actual expenses

Pub. 463 describes two ways to deduct business use of your car:

1. Standard mileage rate. Multiply your business miles by the IRS rate. You can still deduct business parking and tolls separately. You can't also deduct gas, insurance, repairs, or depreciation for that car.
2. Actual expenses. Deduct the business-use percentage of what you actually spent on gas, oil, repairs, insurance, registration, lease payments or depreciation, and so on.

A key rule from Pub. 463 and IRS Topic No. 510: if you want to use the standard mileage rate for a car you own, you must choose it in the first year the car is available for use in your business. For a leased car, you must use it for the whole lease period. Pub. 463 also suggests working out your deduction both ways if you qualify for both.

The 2026 IRS business mileage rate

The IRS set two business rates for 2026, according to its Standard mileage rates page (checked October 2026):

The mid-year change came from Announcement 2026-11, which raised the business rate to 76 cents for miles driven on or after July 1, 2026. The IRS said the change came from recent increases in fuel prices.

Because the rate changed mid-year, the date of each trip matters. For example, 1,000 business miles driven in March 2026 works out to $725 at 72.5 cents. The same 1,000 miles driven in September 2026 works out to $760 at 76 cents. A log that records dates lets you apply the right rate to each trip.

The IRS hasn't announced the 2027 rate as of this writing. The 2026 rates were published in Notice 2026-10 on December 29, 2025, so check the IRS mileage rates page around the turn of the year before you use a 2027 figure.

Which miles count?

This is where agents most often get tripped up. Pub. 463 says commuting between your home and your regular place of work isn't deductible, no matter how far it is. Trips between work locations, like office to showing or one client meeting to another, generally are.

Two situations from Pub. 463 come up a lot for agents:

• Your home office is your principal place of business. You can generally deduct trips between your home and other work locations in the same business, such as showings, listing appointments, and inspections.
• You have no regular office and no qualifying home office. Your first business contact of the day inside your metropolitan area is treated as your office. The drive from home to that first stop, and from your last stop back home, counts as nondeductible commuting. Trips between stops in between can be deducted.

Your setup determines which miles count, which is one more reason to confirm with a tax professional.

What a usable mileage log includes

Pub. 463 asks you to keep adequate records, and a log made at or near the time of the trip is much stronger than one rebuilt from memory in April. For each business trip, record:

• Date
• Starting point and destination
• Business purpose, such as "Showing, 123 Main St., Smith buyers" or "Listing appointment, Jones"
• Miles driven (from odometer readings or a mapping tool)

Pub. 463 also asks for your total miles for the year, so note your odometer reading on January 1 and December 31.

Habits that make this easier:

• Log at least weekly. Pub. 463 treats a log kept weekly as timely. A few minutes each Friday beats rebuilding a year from memory.
• Tie trips to your calendar or deal records. If a showing is on your calendar and the deal is in your pipeline, the business purpose documents itself.
• Keep parking and tolls with the trip. They're separate from the mileage rate, but easy to lose.

Expenses and your real take-home

Tracking expenses isn't only about deductions. Your commission minus your split, fees, and expenses is what your business actually earns. Plug a typical deal into the free real estate commission calculator to see what reaches your pocket after the split, fees, and an estimated tax set-aside. Then compare that with your monthly costs.

Keep it all in one place

The Solo Agent Business System includes an Expense & Mileage Log with agent-specific categories, a deductible flag, and category totals. It calculates each trip at the IRS rate in effect on that trip's date, and the 2026 rates are preloaded in cells you can edit when the IRS publishes new ones. It's built for Microsoft Excel, with no subscription. It's $44, or $39 with code LAUNCH39. It's an organizing tool, not tax advice, so bring your totals to your tax professional.