How Much Should Real Estate Agents Save for Taxes?

Jessica Gonzalez, CPA | Published October 5, 2026

There is no single safe percentage a real estate agent should set aside for taxes. The right number depends on your net profit, not your gross commission, and on your filing status and other income. For a hypothetical single Texas agent with $90,000 of net profit in 2026, federal income tax plus self-employment tax comes to about 21.5% of profit, or about 16% of the commission deposits that profit came from. Higher earners pay a larger share.

The practical answer: figure your own percentage, move that share of every commission check into a separate tax account, and pay the IRS quarterly from it. Because Texas has no personal income tax, your set-aside covers two federal taxes, income tax and self-employment tax.

I work with real estate agents and team leads across North San Antonio, Stone Oak and Sonterra, and Bulverde. Here is how I build the number.

Why there is no single safe tax percentage for real estate agents

Licensed agents paid by commission under a written contract are treated by the IRS as self-employed for all federal tax purposes. No one withholds tax from your checks. The confusion starts with which number you apply a percentage to:

Gross commission: the full commission on the closing, before the brokerage takes its share.
Your deposit after the split: what lands in your account after the split and fees.
Net business profit: commission income minus expenses like MLS dues, marketing, mileage, and E&O insurance. This is the bottom line of your Schedule C, and it is what you are taxed on.

A percentage of gross commission usually overstates what you owe. And if you carry last year’s percentage into a much bigger year, you may come up short, because each extra dollar of profit is taxed at a higher rate than the average. My real estate agent tax deductions checklist covers the records that make the profit number knowable.

Self-employment tax: the 15.3% piece

Self-employment tax is Social Security and Medicare for the self-employed. Per the IRS:

The rate is 15.3%: 12.4% Social Security plus 2.9% Medicare, applied to 92.35% of net profit.
The Social Security part stops at the wage base. For 2026, it applies only to the first $184,500 of combined wages and self-employment earnings. The Medicare part has no cap.
An extra 0.9% Additional Medicare Tax applies above $200,000 for single filers, $250,000 for joint filers, and $125,000 for married filing separately, counting wages and self-employment income together.
You deduct half of your self-employment tax in figuring adjusted gross income. That lowers income tax, not the self-employment tax itself.

Federal income tax and the 20% QBI deduction

Income tax comes on top. The One Big Beautiful Bill Act (Public Law 119-21) removed the 2025 end date for the current brackets in section 1(j) of the tax code, so they continue under current law unless Congress changes them. For 2026, a single filer pays 10% on taxable income up to $12,400, 12% up to $50,400, 22% up to $105,700, and 24% up to $201,775, with higher rates above that. The standard deduction is $16,100 for single filers and $32,200 for joint filers, per the IRS 2026 inflation adjustments.

The qualified business income deduction

Many agents can also deduct up to 20% of their qualified business income (QBI). The same law removed this deduction’s end date, so it continues under current law. Three points matter:

Real estate is not a “specified service” business. The regulations exclude “services provided by real estate agents and brokers” from brokerage services, per Treas. Reg. §1.199A-5(b)(2)(x). So the phaseout that hits higher earners in fields like law and accounting does not apply.
QBI is a bit less than profit. It is reduced by the deductible half of self-employment tax, self-employed health insurance, and retirement contributions, per Treas. Reg. §1.199A-3(b)(1)(vi).
It is capped at 20% of taxable income (figured before this deduction, minus net capital gain). For many agents, the cap controls.

Above $201,750 of taxable income for single filers, or $403,500 for joint filers, extra limits based on W-2 wages and business property begin to apply in 2026, per Rev. Proc. 2025-32. For a solo agent with no employees, the deduction can shrink a lot.

Texas has no state income tax, so the set-aside is all federal

Article VIII, Section 24-a of the Texas Constitution bars the Legislature from taxing the net incomes of individuals, as the bill analysis for HJR 38 describes. For a Texas agent, the set-aside is federal income tax plus self-employment tax.

Hypothetical example: what a Texas agent might set aside in 2026

This example is hypothetical and illustrative: a single filer in Texas, $120,000 of commission deposits after the split, $30,000 of business expenses, no other income, the standard deduction, and no retirement contributions, health insurance deduction, or credits. Figures are rounded. Your results will differ.

Step	Amount
Commission deposits after split	$120,000
Minus business expenses	$30,000
Net profit (Schedule C)	$90,000
Self-employment tax (15.3% × 92.35% × $90,000)	$12,717
Adjusted gross income ($90,000 minus half of SE tax, $6,359)	$83,641
Minus 2026 standard deduction	$16,100
Taxable income before QBI deduction	$67,541
Minus QBI deduction (capped at 20% of $67,541)	$13,508
Taxable income	$54,033
Federal income tax	$6,599
Total federal tax (income tax + SE tax)	$19,316
Share of net profit	21.5%
Share of deposits after split	16.1%

The QBI deduction would have been $16,728 (20% of $83,641 of QBI), but the taxable-income cap holds it to $13,508. Income tax is 10% of the first $12,400 ($1,240), 12% of the next $38,000 ($4,560), and 22% of the last $3,633 ($799).

If this agent’s split had been 80/20, gross commission would have been $150,000, and the same tax would be 12.9% of gross. Each extra $1,000 of profit adds about $305 of tax. Spread over four estimates, the total is about $4,829 a quarter.

Estimated tax payments for real estate agents in 2026

If you expect to owe $1,000 or more when you file, you generally need to pay estimated tax. The 2026 due dates on Form 1040-ES are April 15, June 15, and September 15, 2026, and January 15, 2027. None fell on a weekend this cycle. When one does, it moves to the next business day. The last 2026 payment, due January 15, 2027, is still ahead.

Pay through IRS Direct Pay from a bank account at no fee, your IRS Online Account, EFTPS, or a mailed 1040-ES voucher.

The safe harbor and the penalty

You generally avoid an underpayment penalty if you pay, on time, the smaller of 90% of your 2026 tax or 100% of your 2025 tax. That becomes 110% if your 2025 adjusted gross income was over $150,000 ($75,000 married filing separately). The penalty works like interest, using the IRS quarterly underpayment rate. It is figured separately for each due date, so a big January payment won’t erase a June shortfall.

Uneven closings: the annualized income method

The annualized income installment method, on Form 2210, Schedule AI, lets each required payment track the income you had actually earned by then. A slow first quarter can mean a smaller April payment, with larger payments after the busy months. If you use it for one due date, you use it for all of them, and you attach Form 2210 to your return.

A simple system for setting aside tax from each commission

Open a separate tax savings account you don’t see every day.
Move a set percentage of every commission deposit into it the day it lands. In the example, that is about 16% to 17%. Yours will differ.
Pay each estimate from that account, never from operating cash.
Run a mid-year projection in June or July with real first-half numbers.
Revisit after a big quarter.

Monthly bookkeeping keeps the profit number current. In my experience, the agents with the easiest April are the ones who move tax money out the day a commission lands.

What changes your tax set-aside percentage

A spouse’s income. On a joint return, your profit stacks on your spouse’s pay and may land in a higher bracket.
W-2 withholding. Raising withholding at a W-2 job can cover part of the gap. It is generally treated as paid evenly through the year, even if withheld late.
Retirement contributions. SEP or solo 401(k) contributions can lower income tax, but not self-employment tax.
Team leads. Splits you pay team members are expenses, so base your percentage on what you keep.
An S corporation. It can change how much income faces Social Security and Medicare tax, but adds payroll and a separate return. See when an S corp pays off for real estate agents.

When to get help with your real estate tax plan

It may be worth getting help if your income jumped, you are near $200,000 of taxable income, you run a team or are weighing an S corporation, your spouse has income you have never coordinated, or you missed estimates this year. My post on what to do if you owe taxes covers next steps. A tax planning session can turn your year-to-date numbers into a specific percentage and payment schedule. No outcome is guaranteed.

Real Estate Agent Tax Set-Aside FAQ

What percentage should a real estate agent set aside for taxes?

There is no single right percentage. In the hypothetical above, a single Texas agent with $90,000 of profit owed about 21.5% of profit, or about 16% of deposits after the split.

Do real estate agents pay state income tax in Texas?

No. Texas has no personal income tax. Your set-aside covers federal income tax and self-employment tax.

Should I base my set-aside on gross commission or my check after the split?

Use what you deposit, adjusted for expenses. Tax is figured on net profit, so a percentage of gross usually overstates what you owe.

What if most of my closings happen late in the year?

Look at the annualized income installment method on Form 2210, Schedule AI. It can lower required payments for slow quarters.

Will an S corporation lower what I need to set aside?

Sometimes, at higher profit levels, but it adds payroll, a separate return, and ongoing costs.

Get your set-aside number from a CPA who works with agents

I’m a Texas-licensed CPA and former IRS Revenue Agent. I offer tax planning sessions from $600, returns with a Schedule C from $1,200 (including your Form 1040), and monthly bookkeeping from $500 a month, each with a fixed fee in writing before work begins. I work in English and Spanish, and military families are welcome. See how I work with San Antonio real estate agents.

To talk through your numbers, book a complimentary 15-minute fit call or call (210) 441-1293. Please don’t email tax returns, Social Security numbers, or IRS notices; I’ll send a secure SmartVault link.

Sources

Want your own set-aside number?

Book a complimentary 15-minute fit call to see whether Jessica can help, or call (210) 441-1293.

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About the author

Jessica Gonzalez, CPA

Jessica Gonzalez, CPA is a Texas-licensed CPA with public-accounting experience, more than 12 years of federal service at DHS, and prior service as an IRS Revenue Agent. She helps clients with tax, bookkeeping, planning, and selected IRS matters.

More about Jessica

General Information Notice
This article provides general educational information and is not tax, legal, investment, or financial advice. Tax rules and their application may change and depend on specific facts. Reading this article or contacting the firm does not create an engagement, representation, or client relationship.

Prior employment with the Internal Revenue Service does not imply endorsement by the IRS.