Mileage Logs for Real Estate Agents

For real estate agents, your car is practically your second office. From driving to listing appointments and showing properties to attending closings and putting up "For Sale" signs, the miles add up quickly. This extensive travel represents a significant opportunity for tax deductions, but only if tracked correctly and consistently.

Why Mileage Tracking is Critical for Agents

Real estate professionals often drive thousands of miles per year for business. With the standard mileage rate (which changes annually), this can translate into thousands of dollars in tax deductions. For example, driving 10,000 business miles could result in a deduction of over $6,000, directly lowering your taxable income. However, the IRS closely scrutinizes vehicle expenses, making accurate logs essential.

What Trips are Deductible?

Generally, you can deduct the miles driven for business purposes. Common deductible trips for real estate agents include:

• Driving from your office to a client's home or a property listing.
• Travel to open houses, both for your own listings and to view others.
• Trips to the hardware store to buy signs, lockboxes, or staging materials.
• Driving to continuing education classes, seminars, or conventions.
• Meeting clients for business discussions (e.g., at a coffee shop or office).
• Running business-related errands, such as to the bank, post office, or title company.

The Commuting Rule Exception

It is important to note that "commuting" miles—driving from your home to your principal place of business (like your brokerage office)—are generally not deductible. However, if your home is your principal place of business (home office), travel to any other business location is usually deductible. Understanding the distinction between commuting and business travel is key to avoiding errors on your tax return.

IRS Record-Keeping Requirements

The IRS requires that you maintain "contemporaneous" records of your mileage. This means you should create the log at or near the time of the trip, not reconstruct it months later. A compliant log must include:

• The date of the trip.
• The mileage driven (or odometer readings).
• The destination (e.g., "123 Maple Street" or "Client Meeting").
• The business purpose (e.g., "Showing property," "Listing presentation").

Estimates and rounded numbers are red flags for auditors. Exact records are your best defense.

Automate Your Logs with Technology

Manually writing down odometer readings in a notebook can be tedious and easy to forget during a busy day of showings. Using a reliable mileage tracking app like the Standard Mileage App ensures that every deductible mile is captured automatically. The app uses GPS to track your trips and allows you to easily classify them as business or personal, generating IRS-ready reports with a single click.

Disclaimer: This article is for informational purposes only and does not constitute tax advice. Real estate agents should consult with a qualified tax professional to discuss their specific situation.