By Prime Corporate Services – an eXp Solutions Trusted Provider
The last quarter of the year is officially here, and for real estate agents, this is the time to get strategic—not just about closing out deals, but about protecting your profits before tax season hits.
Between open houses, listings, and client meetings, it’s easy to put financial planning on the back burner. But the truth is, some of your biggest tax-saving opportunities disappear when the clock strikes midnight on December 31.
There’s still time to act, but the window is closing fast. The smart agents are already taking steps to manage their expenses, reduce taxable income, and set their businesses up for a strong start in the new year.
Here are five year-end tax and business moves every real estate agent should make now to minimize their tax bill and maximize their success heading into next year. If you want personalized tax planning in Q4, you can always schedule a free consultation here.
1. Refresh and Repair Your Office (or Home Office)
Whether you operate out of a brokerage office, a leased suite, or a home office, your workspace is the hub of your real estate business. And this time of year is perfect for making any necessary repairs or improvements—especially if you want to take advantage of potential deductions before year-end.
Here’s the breakdown:
- Repairs (like fixing lighting, repainting walls, or patching drywall) can generally be deducted in full for the year they’re completed.
- Improvements (like new flooring, remodels, or system upgrades) usually need to be depreciated over time rather than deducted all at once.
The IRS considers a project an “improvement” if it enhances or restores property value through betterment, adaptation, or restoration. So, if your office space or home workspace needs attention, completing those repairs now could directly reduce your taxable income this year.
For home offices: The IRS requires that your workspace be used exclusively and regularly for business to qualify. A designated office area that’s clearly separate from personal living space can often qualify for a home office deduction.
If you’re unsure how to categorize your expenses or what’s deductible, this is the perfect time to check in with your CPA or a business tax strategist who understands real estate professionals.
2. Upgrade Your Equipment and Technology
As a real estate agent, your tools are your lifeline—from your phone and laptop to the camera you use for listing photos. The good news? Many of those purchases may qualify as deductible business expenses, especially if made before year-end. (Forbes)
By this point in the year, you probably have a clear idea of how much you’ve earned and what’s left in your budget. That makes this the ideal time to reinvest in your business—while lowering your taxable income in the process.
Under Section 179 or bonus depreciation rules, qualifying equipment can often be written off entirely in the year it’s purchased and placed in service.
Consider upgrading or purchasing:
- A new laptop, tablet, or smartphone for managing listings and client communication
- Photography or video equipment for property marketing
- CRM systems, lead-tracking platforms, or marketing software
- Office furniture or signage
- Printers, scanners, or tech accessories
And remember—many tech retailers offer major end-of-year promotions, so you could save on both the purchase price and your tax bill.
Pro tip: To count for this tax year, the equipment must be placed in service before December 31—not just ordered or shipped. Make sure it’s up and running before year-end.
3. Prepay for Business Services You’ll Use Next Year
Real estate is a relationship-driven business—but it’s also a service-driven one. You rely on marketing tools, subscriptions, and support services to keep your business moving.
One of the smartest year-end strategies is to prepay for services you know you’ll use next year. This allows you to lock in deductions now and often secure better pricing for annual commitments.
If your business operates on a cash basis (as most agents’ do), you can typically deduct prepaid expenses in the year they’re paid—so long as they don’t extend more than 12 months into the future.
Services to consider prepaying for include:
- Marketing campaigns or ad spend for early 2026
- CRM systems and lead-generation platforms
- Website hosting or design services
- MLS fees or professional memberships
- Continuing education courses or licensing renewals
- Office rent, co-working memberships, or virtual assistant retainers
It’s a simple but effective move: you’ll reduce your taxable income this year while setting your business up for success next year.
4. Review Your Vehicle Strategy
If you’re in real estate, you already know how much time your car spends shuttling between showings, inspections, and closings. That means your vehicle expenses are often one of your most significant (and most deductible) business costs.
The fourth quarter can be a perfect time to evaluate whether it’s worth upgrading your vehicle or adjusting how you track and claim your deductions.
Here are two primary ways to deduct vehicle use:
- Standard mileage rate – Deduct a set amount per mile driven for business (the IRS rate for 2025 will be updated soon).
- Actual expense method – Deduct actual costs like gas, maintenance, insurance, and depreciation based on business use percentage.
If you’re considering buying a new vehicle, acting before year-end can also yield big benefits. Many dealerships discount current models as they clear inventory for next year, and qualifying vehicles may even be eligible for Section 179 deductions or bonus depreciation if used primarily for business.
Reminder: To qualify, your vehicle must be used more than 50% for business, and you’ll need accurate mileage records to substantiate your deductions.
Real estate agents often underestimate how much vehicle deductions can add up to—so make sure you’re tracking mileage and expenses carefully before the year wraps up.
5. Plan (and Pay) Bonuses or Commission Adjustments Early
If you work with assistants, showing agents, or team members, this is the perfect time to review compensation and bonus plans.
Paying out bonuses, commissions, or profit-sharing before December 31 not only helps recognize hard work and loyalty—it can also reduce your taxable income for the year.
Even if you’re a solo agent, this same principle applies to your own compensation structure if you’re set up as an S Corp or pay yourself through payroll. Your CPA can help you determine the most strategic way to handle year-end distributions or additional pay.
For team leaders and brokerage owners, bonuses or additional pay can be an excellent way to strengthen relationships and set a positive tone heading into the new year—all while optimizing your tax position.
Timing matters: Payments must be issued and cleared before December 31 to count toward this tax year. Promises or post-dated payments won’t qualify.
Bonus Move: Schedule a Year-End Tax & Business Review
No matter how organized or experienced you are, year-end is the time to bring in expert eyes. A quick review with a CPA or business strategist who understands real estate can uncover opportunities you may have missed.
A year-end strategy session can help you:
- Confirm estimated taxes and avoid penalties
- Identify deductions you haven’t yet claimed
- Evaluate whether your business structure (LLC, S Corp, etc.) still serves your best interests
- Create a plan for Q1 marketing, budgeting, and expense tracking
Waiting until January is too late—the most powerful tax strategies are the ones implemented before December 31.
Finish the Year Strong
The final months of the year aren’t just about closing deals—they’re about protecting your profits and preparing for growth. The smartest agents don’t wait until tax season to think about their finances. They use this time to get proactive, invest in their businesses, and take control of their future. (HousingWire)
At Prime Corporate Services, we specialize in helping real estate professionals form LLCs, build tax-efficient business structures, and create strategies to keep more of what they earn. If you’re ready to finish the year strong, schedule your free tax and business strategy consultation today. Our experts will help you identify which year-end moves will have the biggest impact for you—so you can start next year on solid financial ground.
Ready to take action?
The window to make these moves closes soon. Don’t wait until January—by then, it’s too late. Book your free year-end strategy call with Prime Corporate Services today.
