We Help Realtors, Brokers, Property Managers, and Real Estate Investors Maximize Deductions and Navigate Complex 1099 Rules.
Working in real estate in Northern Virginia means managing commissions, tracking expenses across multiple properties, handling 1099 income from brokerages, and dealing with complex deduction rules. Whether you’re a realtor, broker, property manager, or real estate investor, tax planning is critical to keeping more of what you earn.
At LMN Tax Inc in Manassas, we’ve spent over 22 years helping real estate professionals across Prince William County, Loudoun County, and Fairfax County reduce their tax burden and stay compliant. We understand commission-based income, rental property depreciation, and the specific deductions real estate pros can claim.
– Residential sales agents
– Commercial real estate agents
– Real estate brokers
– Team leaders
– Residential property managers
– Commercial property managers
– HOA management companies
– Rental property owners
– House flippers
– Wholesalers
– Land investors
The #1 missed deduction for agents. Driving to property showings, open houses, broker meetings, and client appointments generates deductible mileage at 70 cents per mile.
Many agents work from home but don't claim the home office deduction. If you have a dedicated space used exclusively for business, you can deduct a portion of rent/mortgage, utilities, and insurance.
Website costs, photography, staging, advertising, and social media marketing are all 100% deductible, but many agents don't track these properly.
Real estate investors often don't take depreciation deductions on rental properties, leaving thousands in deductions unclaimed.
Commission income fluctuates wildly. Paying flat quarterly amounts instead of calculating based on actual income wastes money.
The 20% Qualified Business Income deduction for pass-through entities can save self-employed real estate agents thousands, but many don't understand how to calculate it.
What qualifies:
– Driving to property showings
– Open houses
– Client meetings
– Broker meetings
– Property inspections
– Taking photos of listings
Tracking method: Use MileIQ, QuickBooks Self-Employed, or a mileage log app
Two methods:
Simplified method: $5 per square foot up to 300 sq ft (maximum $1,500/year)
Actual expense method: Calculate business percentage of home and deduct that percentage of:
– Mortgage interest or rent
– Property taxes
– Utilities
– Insurance
– Repairs and maintenance
100% deductible:
– Website design and hosting
– Professional photography
– Staging costs
– Yard signs and directional signs
– Business cards and flyers
– Social media advertising
– Google Ads and Facebook Ads
– MLS fees
– Zillow Premier Agent
– Virtual tour services
Deductible:
– National Association of Realtors (NAR) dues
– Local MLS fees
– Virginia Realtors Association dues
– Professional liability insurance (E&O)
– Continuing education courses
– Real estate license renewal fees
If you hire transaction coordinators, showing assistants, or virtual assistants, their pay is fully deductible. Remember to issue 1099-NEC if you pay them $600+ annually.
Residential rental property: Depreciate over 27.5 years
Commercial property: Depreciate over 39 years
Example: A Gainesville investor buys a rental property for $400,000 ($350,000 building value, $50,000 land). Annual depreciation = $350,000 ÷ 27.5 = $12,727 per year.
Accelerate depreciation deductions through cost segregation studies. This reclassifies building components into shorter depreciation periods.
Sell one investment property and buy another without paying capital gains tax immediately. Strict timing rules apply (45 days to identify, 180 days to close).
If you rent property on Airbnb/VRBO and meet certain requirements, rental losses may be deductible against other income (rental real estate professional status).
Rental property losses are generally passive and can only offset passive income. Exception: If you actively participate and earn under $150,000 AGI, you can deduct up to $25,000 in losses.
The problem: Commissions fluctuate. You might earn $80,000 in Q2 (spring market) and $15,000 in Q4 (slow season).
Our solution: Calculate estimated taxes based on actual income each quarter, not flat amounts. This prevents overpayment during slow quarters.
Self-employed real estate agents can deduct 20% of qualified business income (QBI) if income is under $383,900 (married) or $191,950 (single) for 2025.
Example: A Centreville realtor has $120,000 net profit on Schedule C. QBI deduction = $120,000 × 20% = $24,000. At 25% tax rate, this saves $6,000 in federal taxes.
License fees and continuing education costs are fully deductible.
When flipping properties, recordation tax paid at purchase and sale is factored into basis and gain calculations. We ensure proper tracking.
Rental property owners in Prince William County must track property tax payments for deductions.
Call (571) 326-7900 for real estate tax help.
We serve real estate professionals in:
– Manassas, Gainesville, Haymarket
– Bristow, Centreville, Fairfax
– Woodbridge, Dale City
– Throughout Prince William County, Loudoun County, Fairfax County
LMN Tax Inc – Serving Northern Virginia real estate professionals since 2003. Not CPAs or Enrolled Agents.
