The day you get your license, you run a small business. This lesson covers what the IRS says about taxes on your commissions, the records it tells you to keep, and the federal rules for calling, texting, and emailing people: the place where a new agent's marketing can turn into a fine.
Every fact links to its source. Checked Oct 3, 2026
Taxes on your own income
A licensed real estate agent is a statutory nonemployee. The IRS treats the agent as self-employed for all federal tax purposes, including income and employment taxes, when two more conditions are true: (1) substantially all pay for the agent's services is directly related to sales or other output, not to the number of hours worked; and (2) the agent works under a written contract that says the agent will not be treated as an employee for federal tax purposes. (Source: IRS)
A business uses Form 1099-NEC to report payments for services to a person who is not its employee. The threshold is $2,000 or more in a calendar year for payments made after December 31, 2025. Before that date, it was $600. (Source: IRS)
The payer must give Form 1099-NEC to the payee and file it with the IRS by January 31. (Source: IRS)
You must report all income on your tax return, even if you do not get a Form 1099 from a business that pays you. (Source: IRS)
A self-employed person reports business income and expenses on Schedule C (Form 1040) and figures self-employment tax on Schedule SE. You must file a return if your net earnings from self-employment are $400 or more. (Source: IRS)
Self-employment tax has two parts: 12.4% for Social Security and 2.9% for Medicare, 15.3% in total. The Social Security part applies only up to a maximum amount of net earnings, and that amount changes each year. (Source: IRS)
When you figure your adjusted gross income, you can deduct one-half of your self-employment tax. (Source: IRS)
An individual, including a sole proprietor, generally must make estimated tax payments if they expect to owe $1,000 or more when they file their return. Form 1040-ES is the form to figure and pay estimated tax. (Source: IRS)
The year has four estimated tax periods. The payment for January 1 to March 31 is due April 15. The payment for April 1 to May 31 is due June 15. The payment for June 1 to August 31 is due September 15. The payment for September 1 to December 31 is due January 15 of the next year. (Source: IRS)
You generally avoid an underpayment penalty if you owe less than $1,000 after withholding and credits, or if you paid at least 90% of the tax for this year or 100% of the tax on last year's return, whichever is smaller. Different rules apply to higher-income taxpayers. (Source: IRS)
Business expenses and records
To be deductible, a business expense must be both ordinary and necessary. An ordinary expense is common and accepted in your field of business. A necessary expense is helpful and appropriate for your business. (Source: IRS)
To deduct business use of your home, you must use that part of the home exclusively and on a regular basis as your principal place of business, or as a place where you meet or deal with clients or customers in the normal course of your business. You cannot deduct business expenses for a part of your home that you use for both personal and business purposes. (Source: IRS)
The simplified method for the home office deduction uses $5 per square foot of the part of the home used for business, up to 300 square feet. (Source: IRS)
If you use your car only for business, you may deduct its entire cost of ownership and operation, subject to limits. If you use it for both business and personal purposes, you may deduct only the cost of its business use. (Source: IRS)
The IRS business standard mileage rate for 2026 is 72.5 cents per mile from January 1 to June 30, 2026, and 76 cents per mile from July 1 to December 31, 2026. For 2025, it was 70 cents per mile. (Source: IRS)
The law does not require a specific kind of records. You can use any recordkeeping system that clearly shows your income and expenses. (Source: IRS)
Supporting documents include sales slips, paid bills, invoices, receipts, deposit slips, and canceled checks. Keep them because they support the entries in your books and on your tax return. (Source: IRS)
The general rule is to keep tax records for 3 years. (Source: IRS)
Keep tax records for 6 years if you do not report income that you should report and it is more than 25% of the gross income on your return. Keep them with no time limit if you do not file a return or if you file a fraudulent return. (Source: IRS)
Under the Telemarketing Sales Rule, a seller or telemarketer must keep its telemarketing records for 5 years from the date the record is produced, unless the rule sets a different period. These records include call details, consent records, do-not-call requests, and records of each access to the National Do Not Call Registry. (Source: Cornell LII)
Calls and texts
Under the FTC's Telemarketing Sales Rule, a seller or telemarketer may not call a number on the National Do Not Call Registry unless (1) the person signed a written agreement to get calls from that seller, with the phone number to call, or (2) the seller has an established business relationship with the person and the person has not asked not to be called. (Source: Cornell LII)
All telemarketers that call consumers in the United States must download the numbers on the National Do Not Call Registry and subscribe each year. From October 1, 2026, the first five area codes are free, each added area code costs $85 for the year, and access to all area codes costs a maximum of $23,425. (Source: FTC)
A seller or telemarketer that must use the registry must sync its call lists with an updated copy of the registry at least every 31 days. (Source: FTC)
An established business relationship lets a company call for up to 18 months after the person's last purchase, delivery, or payment, and for 3 months after the person's inquiry or application. If the person asks not to be called, the company must honor the request. (Source: FTC)
Under FCC rules, a telephone solicitation (a call or message to encourage the purchase or rental of, or investment in, property, goods, or services) may not be made to a residential subscriber before 8 a.m. or after 9 p.m., local time where the called person is. The FCC applies this rule and its do-not-call rules to telemarketing calls and text messages to cell phones too. (Source: Cornell LII)
When a person asks a telemarketing caller not to call again, the caller must record the request at that time and honor it within a reasonable time, not more than 10 business days. (Source: Cornell LII)
The FCC has confirmed that a text message sent with an autodialer is a "call" under the Telephone Consumer Protection Act (TCPA). (Source: FCC)
A call made with an autodialer or an artificial or prerecorded voice to a cell phone needs the called person's prior express consent, with limited exceptions such as calls for emergency purposes. When that call advertises or is telemarketing, it needs prior express written consent: a written agreement, signed by the person (an electronic signature can count), that clearly authorizes such calls and says that signing is not a condition of a purchase. (Source: Cornell LII)
A person can revoke consent to these calls and texts by any reasonable method. A reply text of "stop," "quit," "end," "revoke," "opt out," "cancel," or "unsubscribe" always counts. The caller must honor the request within a reasonable time, not more than 10 business days, and may not require one exclusive way to revoke. (Source: Cornell LII)
The FCC's revocation rule in 47 CFR 64.1200(a)(10) took effect on April 11, 2025. One part of it is delayed until January 31, 2027: the part that makes a revocation sent in reply to one type of informational message apply to all future robocalls and robotexts from that caller on unrelated matters. (Source: FCC)
Marketing email
The CAN-SPAM Act covers all commercial email: any email whose primary purpose is the commercial advertisement or promotion of a commercial product or service. It is not limited to bulk email, and it has no exception for business-to-business email. (Source: FTC)
Each commercial email must have accurate header information ("From," "To," "Reply-To," and routing), a subject line that reflects the content, a clear and conspicuous statement that the message is an advertisement, your valid physical postal address, and a clear and conspicuous explanation of how to opt out. (Source: FTC)
A valid physical postal address is your current street address, a post office box registered with the U.S. Postal Service, or a private mailbox registered with a commercial mail receiving agency. (Source: FTC)
You must honor an opt-out request within 10 business days. The opt-out method must work for at least 30 days after you send the message. (Source: FTC)
You may not charge a fee to opt out, ask for personal information beyond an email address, or require any step other than a reply email or a visit to a single web page. After a person opts out, you may not sell or transfer the address, except to a company you hired to help you comply with the law. (Source: FTC)
The company whose product the email promotes and the company that sends the email can both be held legally responsible. (Source: FTC)
An email with only transactional or relationship content is exempt from most CAN-SPAM rules, but it must not have false or misleading routing information. (Source: FTC)
Each separate email that violates the CAN-SPAM Act can bring a penalty of up to $53,088. (Source: FTC)
Not in this lesson
The transaction, disclosures, agency, and how to choose a brokerage: other lessons.
Prospecting scripts and lead generation: this course does not teach sales.
How long a broker must keep transaction records: your state guide.
State income tax and state estimated tax payments: your state guide.
State do-not-call lists and state rules for calls and texts: your state guide.
Whether a specific lead source, call list, or text campaign has the consent it needs: your broker or an attorney.
How these tax rules apply to your own return, which expenses you can deduct, and which home office or car method to use: a tax adviser.
Reddy University
Try it with Reddy
Reddy handles the paperwork side of real estate: deadlines, documents, drafts, and reminders. Ask it something like:
“Remind me a week before each quarterly estimated tax payment is due.”
“Draft an email footer with the parts that marketing email must include.”
