Schedule C deductions
Commission income on 1099-NEC goes on Schedule C. The typical real estate agent's deductions include:
- Vehicle mileage (the single biggest deduction for most agents)
- MLS fees, board dues, and franchise fees
- Marketing: signs, photography, online ads, print materials
- Continuing education and license renewal
- Home office (exclusive and regular use)
- Phone and internet (business-use percentage)
- Client entertainment (50% deductible)
S-corp election
Agents earning $60,000+ in commissions typically save meaningful payroll tax by electing S-corp treatment. The election splits income between reasonable salary (subject to payroll tax) and distributions (not subject to payroll tax). We model the break-even for your actual numbers before recommending the structure.
Quarterly estimates
Self-employment tax runs 15.3% on top of federal income tax. Without quarterly estimates, you face underpayment penalties plus a large April balance. We calculate and schedule the quarterly 1040-ES payments.
Common questions
- When should I form an S-corp?
- Typically once net commission income clears $45,000–$60,000. Below that, the cost of payroll and corporate filings exceeds the tax savings. We run the math both ways.
- Can I deduct my car or should I use mileage?
- Most agents come out ahead with the standard mileage rate due to high annual miles. Actual expenses win in specific situations (heavy vehicle, lease arrangement). We compare both methods the first year.
Related
Personal Income Tax Preparation
Federal and state 1040 preparation with year-round planning. Serving individuals in Florida and all 50 states.
Tax Planning
Year-round tax planning for individuals and business owners. We model decisions before they become tax liabilities.
Florida Business Incorporation
Form an LLC, S-corp, or C-corp in Florida with the right entity structure and IRS election in place from day one.