Real estate is a driving profession. Between showings, open houses, client meetings, inspections, and closings, the average agent puts 20,000 to 30,000 miles on their car every year. At the current IRS rate of 70 cents per mile, that adds up to $14,000 to $21,000 in potential tax deductions.
The problem is that many agents leave a large portion of those deductions unclaimed because they do not track their miles consistently. This guide covers exactly which trips count, the mistakes that cost agents money, and how to build a mileage log that holds up under scrutiny.
Why mileage tracking matters for real estate agents
Most real estate agents are classified as independent contractors, even when they work under a brokerage. That self-employed status means you file Schedule C and can deduct all ordinary business expenses, including mileage.
Your mileage deduction directly reduces your taxable income. It lowers both your income tax and your self-employment tax (15.3%). For an agent driving 25,000 business miles per year, the deduction is worth roughly $17,500, which translates to $4,000 to $5,000 in actual tax savings depending on your bracket.
Without a proper log, you lose that deduction entirely if you are ever audited. The IRS does not accept estimates or guesses.
Which trips are deductible?
As a real estate agent, nearly every work-related trip qualifies as a business mile. Here are the most common deductible trips:
- Client showings - Driving to show properties to buyers
- Open houses - Travel to and from open house events you host
- Property inspections and walk-throughs - Visiting listings before or during a sale
- Closings and signings - Trips to the title company or attorney’s office
- Client meetings - Meeting buyers or sellers anywhere outside your office
- MLS meetings and training - Industry events, continuing education, board meetings
- Supply runs - Picking up signs, lockboxes, marketing materials
- Networking events - Real estate conferences, chamber of commerce events
The commute question: office vs home office
Here is where many agents get confused. The IRS does not allow you to deduct your regular commute from home to your primary workplace. If you drive to the brokerage office every morning, that trip is a non-deductible commute.
However, if you have a home office that qualifies as your principal place of business, the rules change. With a qualifying home office, every trip from home to a client, a showing, or any business location becomes a deductible business mile.
For most agents, the home office changes the math dramatically. Instead of losing the first and last trip of the day to the commute exclusion, every single business trip starts from your deductible home base.
To qualify, your home office must be a dedicated space used regularly and exclusively for business. A corner of the dining table does not count. A dedicated room or a partitioned area of a room does. For more on how the IRS draws the line, see our guide on business miles vs commuting miles.
If you work from home before heading out to showings, set up a qualifying home office. It turns your brokerage office visit into a deductible business trip instead of a non-deductible commute. This alone can add thousands of deductible miles per year.
How many miles can you realistically deduct?
Real estate mileage follows seasonal patterns. Spring and summer are peak selling seasons, and your driving reflects that. Here is what a typical year looks like for an active agent:
| Season | Monthly miles | Typical activities |
|---|---|---|
| Winter (Jan-Feb) | 1,000-1,200 | Listings prep, client meetings, planning |
| Spring (Mar-May) | 2,000-2,500 | Heavy showings, open houses, inspections |
| Summer (Jun-Aug) | 2,000-2,500 | Peak season, multiple closings, showings |
| Fall (Sep-Oct) | 1,500-2,000 | Steady activity, closings, new listings |
| Holiday (Nov-Dec) | 800-1,200 | Slower season, year-end closings |
An active full-time agent easily hits 20,000 to 30,000 business miles per year. At $0.70 per mile, that is a deduction between $14,000 and $21,000.
Five common mileage tracking mistakes agents make
1. Not tracking at all. The biggest mistake is also the most common. Many agents assume they can estimate their mileage at tax time. The IRS requires contemporaneous records, meaning you need to log trips as they happen, not reconstruct them in April.
2. Missing the trips between showings. If you show three properties in one afternoon, do not log it as one trip. Each leg of the journey is deductible, including the drive between properties. Those connecting miles add up.
3. Forgetting supply runs. Picking up signs from the office, dropping off lockboxes, running to the print shop for flyers - these are all deductible business miles that agents routinely forget.
4. Confusing commuting with business travel. If you drive from home to the brokerage every day, that is a commute unless you have a qualifying home office. However, driving from the brokerage to a client showing is always a business trip.
5. Mixing personal and business trips without notes. Stopping for personal errands during a business trip creates a gray area. Log only the business portion and note where the personal detour started and ended.
Compare your total odometer reading change for the year against your logged business miles plus estimated personal miles. If the numbers do not add up, you may be missing trips. The IRS looks at this ratio, so make sure yours is reasonable.
What the IRS requires in your mileage log
Your mileage log must include four things for every business trip:
- Date of the trip
- Destination (address or general location)
- Business purpose (e.g., “showing at 123 Oak St with buyer” or “open house at 456 Elm Ave”)
- Miles driven
The IRS also recommends recording your odometer reading at the start and end of each year to establish your total annual mileage. For the full list of requirements, see our IRS mileage log requirements guide.
Standard mileage rate vs actual expenses for agents
Most agents use the standard mileage rate because it is simpler. You multiply your business miles by the IRS rate and take the deduction. No need to save gas receipts or track insurance payments.
However, if you drive a newer, expensive vehicle, the actual expenses method might give you a larger deduction. This requires tracking every vehicle cost and applying your business-use percentage. For a detailed comparison, see our standard mileage rate vs actual expenses guide.
The easiest way to track mileage as an agent
You are already juggling listings, clients, negotiations, and paperwork. Adding manual mileage logging to your daily routine is the last thing you need.
Tripbook solves this by running in the background on your iPhone. It uses GPS to automatically detect and record every trip. After each day, open the app and swipe to classify trips as business or personal. The whole process takes seconds.
When tax time arrives, export your complete mileage log as a PDF, CSV, or XLS file. Hand it to your accountant and you are done. Every trip includes the date, distance, route, and classification the IRS expects.
Start building your mileage log today
Every untracked mile costs you roughly 70 cents in lost deductions. For an active agent, that adds up to thousands of dollars per year. Do not wait until January to wish you had been tracking.
Download Tripbook free on the App Store and start capturing every deductible mile automatically. Your next showing is already worth tracking.
