Bookkeeping for real estate agents & brokers
that books your commission income the way the 1099-MISC reports it
Licensed agents, associate brokers, designated brokers, and small team leads. We handle gross commission + broker split, MLS/Supra/E&O/CRM expenses, 1099 referral tracking, vehicle mileage, and cost-per-listing analysis — so Schedule C at year-end is clean.
Own rental properties too? See property management bookkeeping for Schedule E work.
What we look at every month
The expense buckets and revenue mechanics that only apply to licensed real estate professionals — not investors or landlords.
Commission income (gross + split)
Full commission recorded as revenue, broker split recorded as expense. Net reconciles to the bank deposit and matches the January 1099-MISC.
Broker desk fees
Monthly or per-transaction desk fees tracked as a separate expense category — not mixed in with commission splits.
MLS dues & lockbox fees
MLS subscription (local board + state + NAR), Supra/eKEY lockbox fees, and professional membership dues each in their own line.
E&O insurance
Errors & omissions premium — tracked monthly or amortized from annual prepayment. Separate from general liability.
CRM & transaction coordinator
KVCore, Top Producer, Follow Up Boss, Chime, Dotloop, Skyslope — each as a recurring subscription. TC fees tracked per transaction.
Continuing education
CE courses required to maintain license. Tracked annually against the license renewal cycle.
Referral income (1099 tracking)
Referral fees paid to other agents ($600+ threshold triggers 1099-NEC). Referral fees received tracked as commission income.
Marketing by listing
Professional photography, drone, 3D tours, staging, Facebook ads, Zillow Premier — tagged to the listing so cost-per-listing is visible.
Vehicle mileage (real deduction)
Contemporaneous log of showings, open houses, listing presentations. Standard mileage rate (67¢/mi in 2024) or actual expenses — whichever wins.
Home office allocation
For listing prep, client follow-up, and transaction work done from home. Simplified or actual method — computed monthly.
What usually goes wrong
Five specific mistakes we find on almost every agent cleanup.
Booking gross commission when the broker split is pre-deducted
If your closing statement shows $10K commission and the broker pays you $7K net, booking $7K as revenue understates both your income and your split expense. The 1099-MISC your broker issues will show $10K, creating a mismatch that invites IRS scrutiny. Correct treatment: record $10K revenue, $3K commission split expense, reconcile to $7K deposit.
Missing 1099 on referral income paid to other agents
Paid a $2,500 referral fee to another agent for a warm lead? That triggers 1099-NEC at year-end (threshold is $600). Paid $600+ to a transaction coordinator? Same. Most agents file zero 1099s despite having several payees that qualify.
Lumping all brokerage fees together
Desk fee, MLS dues, E&O insurance, franchise marketing fee, and tech fee are each their own expense category with different tax treatments (and deductibility). Dumping them all into 'Brokerage Expense' makes audits messy and hides where your overhead is growing.
Missing home office deduction
Agents between showings do CRM work, listing prep, and transaction management from home. That's eligible for home office deduction — simplified method ($5/sq ft up to 300 sq ft) or actual method (business use % of home expenses). Missing this easily loses $1,500–$4,000 of deduction per year.
Personal vehicle use contaminating business mileage
No contemporaneous log = no mileage deduction on audit. Mixed-use vehicles (business + family) require a log showing business miles vs total miles. A $10K mileage deduction without a log can evaporate on a routine desk audit.
What your books should tell you every month
The numbers that actually help you run a better real estate practice.
Net commission per closing
Gross commission minus broker split, minus TC, minus direct listing cost. The true income per deal — drives which lead sources are worth paying for.
Cost per listing
Photography, staging, drone, marketing, mileage, and time. Compare to average net commission to see whether a listing type (or price point) is actually profitable.
Average days to close
From listing contract to close, by listing. Drives cash-flow planning and identifies transactions that are bleeding time.
Net profit per month after desk fees
Gross commission minus broker split minus all desk/MLS/CRM/marketing overhead. The number that tells you whether the current brokerage arrangement is working.
Documents we need from you
Connect bank feeds and upload the items below.
When basic bookkeeping isn't enough
You've outgrown the Essentials plan when any of these show up:
- Running a small team (team leader pays buyer's agents and TCs on salary or split)
- S-Corp election (payroll, K-1, reasonable salary analysis)
- Also own investment rentals (Schedule E + Real Estate Professional election analysis)
- Own your own brokerage (designated broker with managed agents)
- Multi-state licensure with multi-state tax obligations
FAQs — Real Estate Agent & Broker Bookkeeping
How do I book commission income when my broker takes their split first?
On every closing, the brokerage receives the commission from escrow, takes their split (say 30%), and pays you the net. Book the full gross commission as income, then book the broker's split as an expense (often 'Commission Split Paid'). The net to you should reconcile to the bank deposit. Booking only the net understates both your revenue and your commission-split deduction — and creates mismatches against the 1099-MISC your broker issues in January.
Is my CRM subscription deductible?
Yes. KVCore, Top Producer, Follow Up Boss, Chime, Dotloop, Skyslope, and similar platforms are ordinary and necessary business expenses for a licensed agent. Same for MLS dues, E&O insurance, continuing education, lockbox/Supra fees, and professional membership (NAR, state, local board). We keep them in separate expense lines so you can see where your overhead actually goes — most agents are spending $400–$800/month on subscriptions without realizing it.
Schedule C vs Schedule E for agents?
Schedule C = active trade or business income (your agent commissions). Schedule E = passive rental property income (if you also own rentals). A licensed agent who earns commission files Schedule C for that activity. If the same person also owns investment property, that goes on Schedule E. The two are separate — don't co-mingle agent commissions with rental income. Some agents who materially participate in rentals may qualify for the Real Estate Professional election, which has meaningful tax implications (see next).
What's the real estate professional tax election?
IRC §469(c)(7) allows taxpayers who meet the real estate professional tests (more than half of personal services in real-estate trades/businesses AND 750+ hours per year in those activities) to treat rental losses as non-passive — fully deductible against active income. This is valuable for agents who also own rentals producing paper losses from depreciation. The election requires careful documentation of hours (a contemporaneous log) and is frequently challenged on audit. We help you track the hours, but the election itself is a tax advisor decision.
How do I handle referral income to other agents?
If you pay another licensed agent a referral fee ($600+ in a calendar year), you must issue a 1099-NEC in January. If you receive a referral fee, it's taxable commission income. Brokers typically handle this via the brokerage, but agent-to-agent referrals (and referrals to non-brokerage agents like relocation) often fall through the cracks. We track referral payments made and received all year so 1099 season is a formality.
How do I track vehicle mileage for an agent?
Agents are among the top professions for legitimate vehicle mileage — showings, client meetings, open houses, listing presentations. You need a contemporaneous log (app, spreadsheet, or GPS export) that shows date, start/end odometer or miles, destination, and business purpose. Either standard mileage rate (67¢/mi for 2024) or actual expenses × business use %. Most agents come out ahead with standard mileage. Mixing personal and business driving without a log means the IRS can disallow the whole deduction.
Can I deduct a home office when I'm out showing houses all day?
Yes — if you have a space used regularly and exclusively for administrative or management activities of your business (listing prep, client follow-up, CRM work, transaction coordination) and it's your principal place of business for those activities. For most independent agents, the home office qualifies. Simplified method = $5/sq ft up to 300 sq ft. Actual method = business % of home expenses. We compute both and pick the winner.
Do you handle transaction coordinator fees?
Yes. TC fees paid per transaction are deductible in the period the commission is earned. We track TC fees, staging fees, professional photography, and marketing spend by listing so you can see true cost-per-listing and net commission per closing.
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