Most agents are independent contractors — which means every commission check arrives untaxed, and every legitimate business expense reduces what you owe. The agents who overpay aren't missing exotic loopholes. They're missing ordinary deductions they never wrote down.
The big one: your car
Driving is the core expense of the job, and the one most often under-documented. Two methods:
- Standard mileage rate — a flat per-mile deduction for business miles. Simple, and usually the winner for agents with lots of showings.
- Actual expenses — the business-use percentage of gas, insurance, repairs, and depreciation. Can win for expensive vehicles driven mostly for work.
Either way, the deduction lives or dies on the log. A mileage app that runs automatically, or a dated record of trips and purposes, is what survives scrutiny. "I drive about 20,000 miles a year, mostly for work" is not a log.
Deductions we see missed most
What makes it all stick
- A separate business account and card. When every business expense flows through one account, your deduction list builds itself. Mixed accounts are where deductions go to die.
- Receipts captured at the moment. Snap a photo when you pay. April-you will not remember what that $214 charge was.
- Books that show gross commission. Record the full commission, then the split as an expense — so income matches your 1099 and the deduction is visible.
Agents with clean books also tend to qualify smoothly for the qualified business income (QBI) deduction — up to 20% off qualifying business income. It's calculated from your numbers, so its accuracy is only as good as your bookkeeping.
This guide is general information for small business owners — not tax, legal, or accounting advice for your specific situation. Talk to your CPA, or to us, before acting on it.
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