Real Estate Brokers: Maximizing Deductions in 2025
Being a real estate broker means wearing many hats — negotiator, marketer, manager, and sometimes even therapist. But one role often gets overlooked: tax planner. In a commission-based business where income fluctuates dramatically, maximizing deductions is essential. With the right strategy, brokers can save tens of thousands each year.
Top Deductions Brokers Should Leverage in 2025
1. Home Office Deduction
If you run part of your brokerage operations from home, you may deduct a percentage of rent, utilities, and internet. Document the square footage used exclusively for business and apply it against household expenses.
2. Mileage & Auto Expenses
From client showings to inspections, brokers spend countless hours on the road. In 2025, the IRS mileage rate is 67 cents per mile. Alternatively, you can deduct actual expenses like gas, maintenance, and insurance. Tracking every trip with an app can translate into thousands in savings.
3. Marketing & Advertising
Social media ads, flyers, photography, staging, and even open house expenses are deductible. For brokers investing heavily in lead generation, these costs directly reduce taxable income.
4. Continuing Education & Licenses
CE credits, licensing fees, and industry association dues all qualify. Advanced certifications (like CCIM) also add deductible expenses to your portfolio.
5. Health Insurance & Retirement Contributions
Self-employed brokers can deduct health insurance premiums and save further by contributing to SEP-IRAs or Solo 401(k)s. A $20,000 retirement contribution both builds wealth and reduces taxable income.
Example Scenario
A broker earning $250,000 in commissions with $60,000 in deductions could reduce taxable income to $190,000. Depending on the tax bracket, that may save $15,000–$20,000 in federal taxes.
The Takeaway
Tax planning isn’t just for April — it’s a year-round strategy. By keeping meticulous records and working with a CPA who understands real estate, brokers can protect earnings and reinvest in growth.
Ready to keep more of your commissions?
At Shahbaz & Associates, we specialize in tax strategies for real estate professionals. Let’s review your numbers and create a tailored plan to maximize deductions in 2025.