How Much Can a Real Estate Agent Deduct for Mileage?

Updated August 2026 · Reviewed by Adams, Cameron & Co.

The current IRS mileage rate for real estate agents

The IRS sets a standard mileage rate each year for business use of a vehicle, and it can change mid-year when fuel costs move enough to justify it. For 2026, that's exactly what happened. The rate started the year at 72.5 cents per mile for driving done between January 1 and June 30, then the IRS raised it to 76 cents per mile for driving done between July 1 and December 31, citing higher fuel prices. Both figures come directly from the IRS's own published guidance, and the rate that applies to a given drive is whichever one was in effect on the date you drove it, not a single flat number for the whole year.

That split matters for the math. Say a real estate agent logs 9,000 business miles for 2026: 4,500 miles driven in the first half of the year, and 4,500 in the second half. The first half works out to 4,500 × $0.725 = $3,262.50. The second half works out to 4,500 × $0.76 = $3,420. Add those together and the total mileage deduction for the year is $6,682.50, all from driving that's a normal part of running a real estate business, not from any unusual amount of activity. An agent who drives more, say 15,000 business miles, split the same way, would land closer to $11,138 for the year. The rate is small per mile, but real estate agents rack up mileage constantly, and it adds up to a real number by December.

Because the rate itself changed partway through the year, the practical takeaway is to keep dates on every entry in your mileage log, not just a running total. A log that shows one lump figure for the whole year forces you or your CPA to guess how many of those miles fall on each side of the July 1 change. Dated entries remove the guessing and let the correct rate get applied to the correct miles.

Standard mileage vs. actual expenses: which one should you use?

The IRS gives you two ways to calculate a vehicle deduction, and they work very differently.

The standard mileage rate is what's described above: track your business miles, multiply by the rate in effect for each period you drove them, and that's your deduction. It's simple, it doesn't require saving every gas and repair receipt, and for most agents driving a normal, reasonably efficient vehicle, it produces a solid deduction without much recordkeeping overhead beyond the mileage log itself.

The actual-expense method instead has you total up everything you actually spent operating the vehicle for the year, gas, insurance, repairs, maintenance, depreciation, lease payments, then apply your business-use percentage (business miles divided by total miles driven) to that total. If you drove 20,000 total miles and 12,000 were business, your business-use percentage is 60%, and you'd deduct 60% of your actual costs. This method can produce a bigger deduction for agents with an expensive vehicle, high loan or lease payments, or a car that's genuinely costly to maintain and insure, but it requires real receipts for everything, all year, and more involved recordkeeping.

The catch is that you generally can't flip between the two methods freely on the same vehicle. For a car you own, the IRS requires you to choose the standard mileage rate in the first year that vehicle is available for business use if you want the option to switch to it later; if you start with actual expenses in year one, you're generally locked into actual expenses (with depreciation) for that vehicle going forward. For a leased vehicle, whichever method you choose applies for the entire lease term. This is a decision worth making with a CPA before your first year of using a given vehicle for business, not something to change your mind about every April.

What actually counts as business mileage

Not every mile you drive as a real estate agent is a business mile, and the distinction is where agents most often either under-claim or over-claim.

Deductible business mileage generally includes: driving to and from showings, driving to listing appointments and pre-listing consultations, driving to and hosting open houses, driving to closings and title company meetings, driving to client meetings, and driving to your brokerage office if that office isn't your regular, primary place of work. Running errands that are genuinely part of the business, picking up lockboxes or signage, dropping off marketing materials, also generally counts.

What does not count is your normal, everyday commute: the drive from home to whatever location functions as your regular workplace, the same way a W-2 employee's commute to their office isn't deductible for them either. If your brokerage office is where you'd normally start and end most working days, that trip is a commute, not a business drive. Where this gets specific to real estate is that many agents don't have a single fixed daily office the way an employee does; a day that starts with a listing appointment, moves to two showings, and ends at a closing across town is a day made up almost entirely of deductible business mileage, with no ordinary commute at all.

One nuance worth knowing: if you work from a home office and it qualifies as your principal place of business, drives from home directly to a showing, listing appointment, or closing can generally count as business mileage in full, since you're not commuting to a separate regular workplace first. That's a meaningful distinction for agents who do most of their prep and paperwork from home rather than from a brokerage desk, and it's worth confirming with a CPA how your specific setup is treated.

What a compliant mileage log actually needs

If the IRS ever asks an agent to substantiate a mileage deduction, an estimate reconstructed at tax time from memory doesn't hold up. What the IRS wants is a contemporaneous log, meaning one kept close to the time you actually drove, not one built in April from a rough sense of a busy year. For each business drive, that log needs four things: the date, the destination, the business purpose (a showing, a listing appointment, a closing, and so on), and the number of miles driven.

You don't need anything elaborate to keep this. A mileage-tracking app that logs drives automatically is the easiest way for most agents to stay consistent, since it removes the risk of forgetting to record a day. A simple written or spreadsheet log works too, as long as you're actually filling it in as you go rather than trying to rebuild a year of showings from your calendar in the spring. Either way, the habit matters more than the tool: a log with real dates and real destinations, kept all year, is what turns a mileage deduction from a number you hope holds up into one you can actually defend.

It also helps to note your odometer reading at the start and end of the year, or at least at the start and end of when you began tracking. That total-miles figure is what lets you (or your CPA) calculate a business-use percentage if you ever need to compare the standard mileage result against what the actual-expense method would have produced, or if you switch methods on a future vehicle. It takes thirty seconds once a year and can save real guesswork later.

Florida has no state income tax, but this is still real money

Florida doesn't have a state income tax, so a mileage deduction here only affects your federal return, unlike in states where the same deduction also reduces a state tax bill on top of the federal one. That's a genuine simplification, one layer of tax planning you don't have to think about. It doesn't make the deduction smaller, though. On a real estate agent's typical mileage totals, driving to showings, listings, open houses, and closings all year, the deduction from the example above, in the thousands of dollars, comes straight off your net self-employment income before your federal income tax and self-employment tax are calculated. That's real money either way, and it's one of the more straightforward deductions available to an agent who keeps a real log.

This page explains how the mileage deduction generally works and is for educational purposes only, not tax advice. Real estate commission income is typically reported on a 1099 as self-employment income, which changes how deductions like this interact with your overall tax picture. Confirm your specific method, rate application, and log requirements with a CPA who knows your numbers.

What is your next step?

Mileage is one piece of a bigger picture. For the fuller view of how 1099 income, self-employment tax, and deductions fit together for a Florida agent, see how real estate agent taxes actually work.

If you're weighing what the real math looks like at a brokerage that treats this kind of planning seriously, start a conversation with Adams, Cameron & Co.