Guide · 6 min read
Your commission check isn't your income. Your brokerage takes a cut, the IRS takes 25–30% more, and your car eats the rest. Here's how to track what really lands in your bank account.
Free business checking + business credit card. All commission deposits in, all marketing/mileage/MLS expenses out. Pay yourself by transfer to personal.
If a $10,000 closing nets you $6,500 after a 70/30 split with the brokerage, record both numbers. You'll need the split as a deductible business expense at tax time.
Showings, listing appointments, inspections, closings, training, open houses. Use an automatic mileage tracker app — manual logs in a notebook always lose miles. 70¢/mile adds up fast.
Move 25–30% of net commission to a tax savings account immediately after each closing. Quarterly estimated payments due April 15, June 15, September 15, January 15.
Track gross commission, brokerage split, marketing, and mileage in one calm dashboard.
Start freeAlmost always 1099 independent contractors — even if you work under a brokerage. That means you owe self-employment tax (15.3%), pay quarterly estimated taxes, and deduct every legitimate expense yourself. The brokerage doesn't track any of it for you.
Vehicle expenses. Most agents drive 15,000–25,000 business miles a year — at the 2026 IRS rate of 70¢ per mile, that's $10,500–$17,500 in deductions. The actual-expense method (gas, insurance, depreciation pro-rated) sometimes wins for newer vehicles. Track miles all year; don't reconstruct in April.
Yes, but with limits. Closing gifts are deductible up to $25 per client per year (an old IRS cap). Client meals are 50% deductible. Marketing items branded with your logo (calendars, pens) are 100% deductible as advertising — no $25 cap.
Most agents start as sole proprietors and form a PA, LLC, or S-corp once consistently above $80–100k. An S-corp election can save thousands in self-employment tax at that income level, but adds payroll and stricter bookkeeping. Talk to a CPA before electing.
Commissions in (gross), brokerage splits (separately so you see real take-home), marketing, signs and lockboxes, MLS dues, license renewal, E&O insurance, continuing education, mileage, client gifts, office, software (CRM, IDX), and showings/inspection costs you advance.