Real Estate Agent Tax Checklist: Commissions to Costs

A real estate agent tax checklist asks the agent for every Form 1099-NEC from a brokerage, the brokerage's annual commission statement showing splits and fees, license and MLS renewal receipts, marketing invoices, a mileage log for showings and open houses, and a list of client gifts with dates and costs, so the preparer can match income and expenses.

Which brokerage forms does a real estate agent receive?

A real estate agent usually receives a Form 1099-NEC from each brokerage that paid them commissions during the year, plus the brokerage's own commission statement or year-end summary. Agents on a team, or agents who earned referral fees from other brokers, may receive more than one 1099-NEC and should list every payer.

The IRS Instructions for Forms 1099-MISC and 1099-NEC (Rev. 12/2026) say Form 1099-NEC box 1a includes fees, commissions, prizes and awards for services performed as a nonemployee. The reporting floor depends on the year. For tax years beginning after 2025, the same instructions raise the minimum threshold for these information returns to $2,000, while the IRS Instructions for Schedule C (2025) still describe a $600 floor for tax year 2025. A referral fee of $1,500 paid in tax year 2026 may therefore come with no form at all.

The form is not the full income record. IRS Publication 334 (2025) says a business must report all income it receives, including income not reported on a Form 1099. So the checklist asks for three things for each payer:

• Every 1099-NEC, from the agent's main brokerage, any prior brokerage the agent left during the year, and any broker that paid a referral fee.
• The brokerage's annual commission statement, which lists each closing, the gross commission and what the brokerage kept.
• Team payments, such as a split received from a team lead, with whatever statement the team issues.

Ask whether the agent changed brokerages. A move in July means two brokerages and two statements, and the second statement is easy to forget. Ask too whether any client or other party paid the agent directly, outside a brokerage, and note who paid and how much. For the difference between the 1099-NEC and the 1099-MISC, which matters when an agent also receives rent, see 1099-NEC vs 1099-MISC.

Commission splits and brokerage fees on the real estate agent checklist

Commission splits and brokerage fees are the amounts taken out of an agent's commission before the agent is paid. They include the brokerage's split, desk fees, franchise fees and transaction fees withheld at closing. The real estate agent checklist asks for a statement that shows the gross commission, each deduction and the net amount paid.

The distinction between gross and net drives everything else. Some brokerages report the gross commission on the 1099-NEC and list the split as a cost. Others report only what the agent received. The checklist does not decide how to report either one. It collects the brokerage statement so the preparer can see which amount the 1099-NEC shows and whether fees appear anywhere else.

Ask for these records:

• Closing-by-closing commission detail from the brokerage, with property address or file number, gross commission, split percentage and net paid.
• Desk or monthly fees billed by the brokerage, with the invoices or the card statement showing payment.
• Franchise and transaction fees withheld at closing, from the closing statement or brokerage report.
• Splits the agent paid to others, such as a buyer's agent on the agent's team or a referral to another broker.

That last item has a reporting side of its own. The Schedule C instructions (2025) say line 10 takes total commissions and fees for the tax year, and that a business must file Form 1099-NEC to report certain commissions and fees of $600 or more paid during the year. An agent who paid another agent a referral split may need to issue a form, so the checklist asks for the recipient's name and the amount. The Schedule C expense records by line post covers the general Part II layout; this checklist only adds the brokerage-specific lines.

Licensing, MLS and marketing costs real estate agents pay

Licensing, MLS and marketing costs are the yearly expenses of staying licensed and finding clients. For a real estate agent they include license renewals, board and MLS dues, errors and omissions (E&O) insurance, signs, staging, listing photography and online advertising. Each needs a receipt or invoice showing the date, the amount and the vendor.

Licenses have a direct line. The Schedule C instructions (2025) say line 23 covers licenses and regulatory fees for a trade or business paid each year to state or local governments. A state license renewal and any required continuing education registration fee go into the checklist as separate items with their receipts.

Insurance has its own line too. The Schedule C instructions say line 15 takes premiums paid for business insurance. Publication 334 (2025) lists liability insurance and malpractice insurance covering personal liability for professional negligence among the kinds of business insurance whose premiums can generally be deducted. Ask for the E&O declarations page and proof of payment; when the brokerage bills E&O as part of the desk fee, the brokerage statement is the record.

Board and MLS dues are less clear-cut, because some invoices bundle association membership, MLS access and lockbox fees. The checklist asks for each invoice as issued and lets the preparer decide where each part belongs. The Schedule C instructions say Part V, which totals to line 27b, lists ordinary and necessary business expenses not deducted elsewhere, by type and amount.

Marketing records cover:

• Signs, flyers and mailers, with printer invoices.
• Listing photography, video and staging, with vendor invoices tied to a listing address.
• Online advertising, with the platform's invoices or monthly receipts.
• Website and customer list software, with subscription receipts.

Mileage for showings and client gifts for real estate agents

Mileage for showings and client gifts are two real estate agent expenses that need records made during the year. Mileage needs a log of each trip to a showing, open house or closing. Gifts need the cost, date, description and recipient of each closing gift, because the IRS limits the deduction per person.

Mileage first. Agents drive constantly, and a log made at the time is the record that holds up. IRS Publication 463 (2025) says a timely kept record has more value than a statement prepared later, and it sets the 2025 standard mileage rate at 70 cents a mile. What the log itself should contain, and the questions about last year's vehicle method, are covered in home office and vehicle details for Schedule C. For an agent, ask that the log name the property address on each showing line, because addresses tie trips to listings and closings the brokerage statement already shows.

Gifts next. Publication 463 (2025) says a business can deduct no more than $25 for business gifts given directly or indirectly to each person during the tax year. Incidental costs such as engraving, packaging, insuring and mailing are generally not counted toward that limit, as long as they do not add substantial value to the gift. The same publication's recordkeeping table lists the cost, date and description of each gift as the elements to record.

For a closing gift program, the checklist asks for one row per gift:

• Recipient's name, since the limit is per person.
• Date the gift was given.
• Description, such as a gift basket or a framed photo.
• Cost, split between the gift itself and any engraving, wrapping or shipping.

The IRS Instructions for Form 1120 (2025) carry the same figure for corporations, listing the part of business gifts over $25 among expenses recorded on the books but not deducted on the return. That matters for agents who operate through a corporation, covered in the C corporation tax checklist.

Is a real estate agent self-employed or an employee?

A licensed real estate agent is usually treated as self-employed for federal tax purposes, as a statutory nonemployee. The rule has two conditions: pay tied to sales rather than hours, and a written contract saying the agent is not an employee. Agents paid on a W-2, such as some on-site sales staff for builders, are a different case.

IRS Publication 15-A (2026) names three categories of statutory nonemployees, one of them licensed real estate agents. It says licensed agents are treated as self-employed for all federal tax purposes, including income and employment taxes, if substantially all payments for their services are directly related to sales or other output rather than to the number of hours worked, and their services are performed under a written contract providing that they won't be treated as employees for federal tax purposes.

That gives the checklist two items to request the first year a firm takes on an agent:

• The independent contractor agreement with the brokerage, which is the written contract the rule refers to.
• A description of how the agent is paid, confirming commissions rather than salary or hourly pay.

An agent who receives a Form W-2 is in a different position. Ask for every W-2 alongside the 1099-NECs. Some agents hold a salaried job with a builder or property manager and also sell on their own. If a W-2 shows the "Statutory employee" box checked in box 13, the Schedule C instructions (2025) say that income and its expenses go on Schedule C, and that a person with both self-employment income and statutory employee income must file two Schedules C. The checklist's job is to notice the box, not to decide the answer.

Employees without that box face a narrower rule. IRS Publication 529 (Rev. 12/2020) says miscellaneous itemized deductions can no longer be claimed except by certain qualified categories of employment, so an agent's unreimbursed costs tied to a W-2 job are generally a separate question from the Schedule C list.

Example real estate agent checklist mapped to Schedule C

The table is an example for a fictional agent, Dana Example, affiliated with a fictional brokerage, Lakeview Example Realty. Amounts are illustrative.

The line for desk fees is a judgement the preparer makes from the agreement; the table only shows where the record is filed for review.

Real estate agent records that double-count commission income

Commission income gets counted twice when a net commission statement and a gross Form 1099-NEC are both entered as income, or when a split paid on to another agent is recorded as income and never as a cost. The fix is to match each 1099-NEC to the brokerage statement before either figure is entered.

Here is how it happens. An agent uploads the brokerage's year-end statement showing $77,500 net to the agent, and separately the 1099-NEC showing $96,400 gross. Both look like income documents. If someone keys both, income is overstated by the full statement. If someone keys only the net figure, the return falls short of the 1099-NEC total, and the Schedule C instructions (2025) say that when box 1 of the Forms 1099-NEC totals more than the amount on line 1, a statement explaining the difference should be attached.

The check is a reconciliation, one row per payer:

• 1099-NEC box 1a amount.
• Gross commission per the brokerage statement.
• Splits and fees per the brokerage statement.
• Net paid per the brokerage statement and bank deposits.

When gross on the statement equals the 1099-NEC, the form is gross and the fees are costs. When net equals the 1099-NEC, the form is already net, and the fees do not need to be deducted again. Either way, one figure goes on line 1 and the other is the explanation.

The plainer version of the same mistake is the same document sent twice. An agent forwards the 1099-NEC email in January, then uploads a scan of the paper copy in March. Schema CPA flags a second copy of the same form as a duplicate rather than counting it again, and its client tracker demo shows how a duplicate looks beside the received items. Other client types have their own matching problems, covered in the hair stylist tax deduction checklist, where card payouts and cash tips arrive by different routes.