The One Big Beautiful Bill (OBBB) brings some of the most significant tax changes in years—and for real estate professionals, the impact is big. Whether you’re an independent agent, a team leader, or a broker-owner, these updates could affect your income tax bill, your deductions, and how you plan your business expenses.
Below, we’ve broken down the major OBBB provisions that matter most to realtors and real estate sales professionals.
1️⃣ Section 179 & Bonus Depreciation – Huge Equipment & Vehicle Deductions
One of the biggest wins in OBBB is the return of 100% bonus depreciation and an increase in Section 179 expensing limits.
What Changed:
- Section 179 limit: Increased to $2.5M (from $1.16M in 2023).
- Phase-out threshold: Now $4M.
- Bonus depreciation: Back to 100% (was phasing down).
- QBI deduction: Fully restored to 100% for qualifying businesses (including many self-employed realtors).
How Realtors Can Benefit:
- Write off the full cost of qualifying business vehicles (SUVs over 6,000 lbs GVWR, vans, trucks) in the first year.
- Deduct big-ticket purchases like office furniture, computers, signage, and photography equipment.
- Combine 179 and bonus depreciation to maximize savings in high-income years.
Comparison Table – Section 179 vs. Bonus Depreciation
|
Feature |
Section 179 |
Bonus Depreciation |
|
Annual Limit |
$2.5M |
No limit |
|
Phase-out |
$4M |
None |
|
Asset Use |
Must be >50% business use |
Must be >50% business use |
|
New vs. Used |
Both |
Both |
|
Timing |
Must be purchased & in service in same tax year |
Must be purchased & in service in same tax year |
|
Income Limitation |
Limited to taxable income |
No income limitation |
2️⃣ Home Office Deduction – Still a Realtor Favorite
If you run your business from home, the home office deduction remains a powerful tool—as long as you meet the IRS rules.
Key Reminders:
- Exclusive & regular use is required (cannot be a shared family space).
- Must be your principal place of business or where you meet clients.
- Simplified method: $5 per sq. ft. (max $1,500).
- Actual method: Deduct actual expenses based on business-use percentage.
3️⃣ Mileage Deduction – Higher Rates Mean Bigger Savings
Many realtors rack up thousands of miles each year. OBBB doesn’t change the basic mileage rules, but rates have gone up.
IRS Standard Mileage Rates:
- 2023: $0.655/mile
- 2024: $0.67/mile
- 2025: $0.70/mile
If you drive 20,000 miles for business in 2025, that’s a $14,000 deduction.
4️⃣ SALT Deduction Cap Increase – A Boost for High-Tax States
If you live in a state with high income or property taxes, the SALT cap increase could mean thousands more in deductions. This can be especially valuable for realtors in states like TX, CA, NY, NJ, and IL.
5️⃣ Retirement Planning – Use Your 1099 Income to Save More
Self-employed realtors can set up:
- Solo 401(k)
- SEP IRA
- Trump Savings Account (new under OBBB; guidance pending)
With higher income from commissions, these plans can reduce your taxable income while building long-term wealth.
6️⃣ Charitable Contribution Changes – Think Donor-Advised Funds
OBBB increased the AGI limits for charitable deductions, making year-end giving more tax-efficient for high-earning realtors.
7️⃣ High-Income Phaseout Relief
Many credits and deductions that used to phase out quickly for high-income earners (like the Child Tax Credit) now have higher thresholds, making them accessible to more top-producing realtors.
8️⃣ What Realtors Should Do Before Year-End
- Plan major purchases (vehicles, tech, equipment) before December 31 to lock in deductions.
- Track every business mile with an app or log.
- Review your home office space to make sure it meets IRS standards.
- Max out retirement contributions while cash flow is strong.
- Work with a tax pro to integrate OBBB changes into your 2024 and 2025 strategy.
📌 Bottom Line for Realtors
The OBBB has created bigger deduction opportunities, higher credit limits, and restored some powerful tax breaks. Realtors who plan proactively could see dramatically lower tax bills over the next several years.
