Business Expenses as Realtor

[vfescudero]

Can I deduct my MLS and organization fees as business expenses even though I had no sale transactions in 2021 and thus no W-2 ? - Thank you !

[AamilD]

Yes. you can deduct expenses with a caveat: in order for business expenses to be deductible, there must be a profit motive.  If you are deducting thousands with little or no income, the IRS may audit you because the business loss will actually reduce your total income.

[LeonardS]

No, if you receive a W-2 and not a 1099-NEC to report your income you are an employee.  As an employee, you can not deduct unreimbursed business expenses.  You can only deduct business expenses when you are self-employed.

@vfescudero

[vfescudero]

@LeonardS,

Thank you and for additional clarification, this expense would be for my wife, not for myself. She had paid her fees and then put her license on hold, as family duties took priority. She did not receive a 1099, which is what I should have stated instead of a W-2.

Now, it is only about $800 in these expenses, and thus, not sure if I should "muddy" the waters with this expense and $0 income...

Additional recommendations ?

[AliciaP1 · Accepted solution]

With your clarification, you are allowed to deduct the expenses on a Schedule C.  Whether or not you choose to "muddy" the waters is up to you of course!

@vfescudero