Calculator / Real estate agents

Estimated taxes for real estate agents and commission income

Commissions arrive at closing, not on a schedule. Quarterly payments work better when they follow your closings.

How the IRS treats most agents

The IRS treats licensed real estate agents as statutory nonemployees when both of these are true: substantially all of their pay is directly related to sales or other output rather than hours worked, and their services are performed under a written contract stating they will not be treated as employees for federal tax purposes. When both apply, the IRS treats them as self-employed for all federal tax purposes, including income and employment taxes. Your own contract and facts decide where you stand, so confirm yours with a tax professional.

What that means for your payments

If you are self-employed for tax purposes and expect to owe $1,000 or more when you file, you generally pay estimated tax during the year. That covers income tax and self-employment tax (15.3% on 92.35% of net profit, with the Social Security part capped at $184,500 of earnings for 2026). Check how your brokerage handles any withholding on your commission checks, and enter any amount withheld in the calculator.

The trouble with equal quarters

Many agents close little in the winter and a lot in spring and summer. The default method asks for a quarter of the year's required payment on each due date. If your closings are lumpy, the first payments can be large compared with what you had earned so far.

The annualized method follows your closings

With the IRS annualized income installment method (Form 2210, Schedule AI), each payment follows your profit to date. Here is how it works.

Example: single filer, $80,000 of net profit for the year, earned as $5,000 by March 31, $3,000 in April and May, $40,000 from June to August and $32,000 from September to December. The required annual payment is about $16,947 (90% of the year's estimated tax). Equal installments would be about $4,237 on each due date. The annualized method gives about $692 on April 15, $607 on June 15, $9,544 on September 15 and $6,104 on January 15. The total is the same. Only the timing changes.

Choose "In lumps or seasons" in the calculator and enter your net profit for each period to see the amounts for your own year. Profit means commissions minus business expenses.

Two habits that help

When a commission is paid, set aside the tax share right away, so the next due date is already covered.
After each period, replace your guess with the real number and run the estimate again.

This is general information, not tax advice. See the disclaimer.

Sources

Last checked October 11, 2026.