Year-End Financial Checklist for Realtors: US & Canada Guide

For most small businesses, year-end bookkeeping means closing out twelve fairly even months. For a real estate agent, it means reconciling a year that probably had three closings in one month and none in the next, commission checks that arrived weeks after the deal actually closed, and a folder of receipts that quietly grew all year while nobody had time to sort them. None of that is unusual for the business — but it's exactly why year-end needs a checklist instead of a vague plan to "get to it before tax season."

This guide walks through what to actually close out before December 31, the specific numbers and deadlines that apply for the 2026 tax year in both the US and Canada, and how to hand your accountant a package that doesn't need three follow-up emails to make sense of.

Why Year-End Hits Realtors Differently

A W-2 employee's year-end is mostly about their employer's paperwork. A realtor's year-end involves reconciling bank accounts, matching commission statements against actual deposits, sorting a year of expense categories, deciding what belongs to this tax year versus next, and — for agents earning referral income or paying it out — issuing or expecting tax slips from other people entirely.

The deals that close in the last week of December and the ones that go under contract but won't close until January also land on different sides of the tax year, which is exactly the kind of detail that's easy to get wrong without a system tracking deal status by date.

Step 1: Reconcile Every Account Down to the Penny

Start with the accounts, not the receipts. Confirm that the balance you were carrying on January 1 matches what you actually closed out the previous year with, then reconcile your bank accounts by matching every deposit and withdrawal on your December bank and credit card statements against your records. Bank fees, wire fees, and any interest earned should get recorded directly rather than left as unexplained gaps. The statement balance and your book balance should match exactly before you move to anything else — reconciling on a rolling basis throughout the year makes this a quick check instead of a weekend project.

Step 2: Clear Out Uncategorized Transactions

Uncategorized transactions are one of the most common reasons year-end bookkeeping drags on. The fastest way through a backlog is to sort by vendor rather than by date — grouping every charge from the same vendor together lets you categorize dozens of transactions in one pass instead of one at a time. Watch for "mixed" retailers like Amazon, Costco, or a big-box store, where a single receipt might contain both a deductible staging item and a personal purchase — those need to be split rather than categorized as one or the other. Setting up standing rules for recurring vendors (anything from your MLS board, NAR/CREA dues, or a marketing platform) means next year's backlog starts smaller.

Step 3: Confirm Business and Personal Spending Are Actually Separate

If personal and business transactions ran through the same account at any point during the year, year-end is when that catches up with you. Beyond making categorization harder, a co-mingled account gives an auditor a reason to look at everything in it, not just the business activity — and for agents operating through an LLC or S-Corp in the US, mixing funds can undermine the very liability protection the entity was set up for. The clean habit going forward is a one-way transfer: move a set amount from the business account to a personal account as an owner's draw, and spend from there — never pay a personal bill directly from the business side.

Step 4: Match Every Commission to the Broker's Statement

This is the step that catches the most money. For every closed deal, do a three-way check: the gross commission from the final settlement statement, what the brokerage kept (split, desk fee, franchise fee, transaction fee), and the net amount that actually hit your bank account. The gross figure is what gets reported as revenue — the brokerage's cut gets recorded as a business expense, not netted out silently. Reporting only the net deposit as income is a common mistake, and it becomes a real problem if your 1099-NEC or T4A shows the higher gross figure and your return shows something smaller.

Step 5: Sort Pending Deals From Closed Ones

A deal that legally closed on or before December 31 belongs to this tax year, even if the actual deposit doesn't land until January. A deal that's under contract but won't close until January belongs entirely to next year — no revenue or closing costs should be recognized for it yet. This sounds obvious until you're looking at a dozen deals in different stages at once, which is exactly why deal status (active, pending, closed) needs to be accurate and dated correctly before you run any year-end numbers.

Step 6: Don't Lose Track of Pre-Construction Installments

Pre-construction commissions typically arrive in stages — a portion at signing, more at groundbreaking, the rest at occupancy. Both the IRS and CRA generally tax these on the installments actually received or legally due within the year, not on the full projected commission up front. A future installment tied to a milestone that hasn't happened yet isn't taxable this year — but it does need to be tracked so nothing gets missed once it's paid.

Step 7: Account for Referral Fees — Paid and Received

If you paid a referral fee to another agent or brokerage this year, the paying side is generally responsible for issuing the appropriate tax slip. In the US, that's a Form 1099-NEC — and the threshold just changed: the One Big Beautiful Bill Act raised it from $600 to $2,000 for payments made in 2026 and reported in early 2027. In Canada, it's a T4A slip with the amount in Box 048 once payments cross $500 CAD (unchanged). Referral income you received should also be sitting in its own record, separate from standard commission, so a fee that's expected but hasn't arrived yet doesn't quietly disappear into a blended income total.

State tax trap: The higher federal threshold doesn't automatically apply at the state level. A handful of states — including Mississippi, Wisconsin, and Massachusetts — haven't adopted the new $2,000 threshold and still require 1099 filing at $600 for state purposes. If you paid a referral agent or independent contractor somewhere between $600 and $2,000, check your specific state's requirement separately from the federal one before assuming no filing is needed.

Step 8: Confirm Your Sales Tax Position

At year-end, every agent who collects sales tax needs to know which side of the line they're on: payable, where the tax collected on commissions exceeds the tax paid on business expenses, or refund, where heavier business spending flips that balance the other way.

In Canada, this is a GST/HST calculation: tax collected on commissions minus Input Tax Credits (ITCs) claimed on eligible business expenses — desk fees, MLS dues, photography, staging, software — equals your net position. An agent who collected $13,000 in HST across the year but paid $4,000 in HST on business expenses ends the year with $9,000 payable. Agents clearing $30,000 CAD in gross revenue are required to be registered and tracking this.

In the US, real estate commissions are generally treated as professional services and exempt from standard state sales tax, so most agents won't have this calculation at all. A small number of states — including Washington, New Mexico, Delaware, and Hawaii — apply a gross receipts or general excise tax that can reach real estate income, so agents in those states specifically should confirm their exposure.

Step 9: Sort Expenses Into Their Actual Categories

Before handing anything to an accountant, expenses should already be sitting in categories that map cleanly to Schedule C (US) or Form T2125 (Canada) — not living in a single "misc" bucket. The categories that matter most for a realtor:

• Advertising & Marketing — staging, photography, signage, direct mail, online ads

• Professional Fees & Dues — association dues, MLS fees, desk fees

• Licensing & Education — license renewals, continuing education, designations

• Software & Subscriptions — CRM, transaction management tools, cloud storage

• Client Gifts & Meals — closing gifts, promotional items, and business meals (generally only 50% deductible in both countries; entertainment itself typically isn't deductible at all)

Step 10: Lock Down the Mileage Log

Both the IRS and CRA expect a contemporaneous log — date, destination, business purpose, and odometer readings for each trip — not a reconstruction pieced together in December from memory and old calendar invites. The two systems diverge in an important way: US agents can choose between the standard mileage rate or actual vehicle expenses (with some restrictions on switching between them), while Canadian agents are required to use actual expenses prorated to business-use percentage — there's no flat per-kilometre deduction available for the self-employed the way there is in the US.

Step 11: Pull Together Home Office Documentation

If you're claiming a home office, year-end is when the paperwork behind it needs to exist, not just the deduction claim. That means the exact square footage of the space used exclusively for business versus the home overall, plus the underlying bills — utilities, internet, insurance, and rent or mortgage interest — that the deduction is calculated against. In the US, the space has to be used regularly and exclusively for business and serve as your principal place of administrative work, even if most of your actual selling happens out at showings.

Step 12: Run Final Reports and Build the Accountant Package

Once everything above is settled, run your year-end financial reports: a full Profit & Loss statement, and — if you use accounting software — a trial balance. The package that saves an accountant the most time (and saves you the most in review fees) is organized into clear groups rather than handed over as a shoebox:

• Final P&L and December bank/credit card statements

• Annual mileage log plus actual vehicle expense receipts

• All 1099-NEC forms received (US) or T4A slips received (Canada), plus copies of any you issued to referral partners — note the 1099-NEC threshold rose from $600 to $2,000 starting with 2026 payments, so you may issue fewer of these than in past years

• A GST/HST summary showing collected tax versus ITCs claimed (Canada)

• Home office square footage and the underlying utility/rent documentation

Key Deadlines: United States (2026 Tax Year, Filed 2027)

Self-employment tax for 2026 sits at 15.3% — 12.4% for Social Security on the first $184,500 of net earnings, plus 2.9% for Medicare with no cap. The standard mileage rate also changed mid-year: 72.5 cents per mile from January through June 2026, rising to 76.0 cents per mile from July through December.

Key Deadlines: Canada (2026 Tax Year, Filed 2027)

Note the split: Canadian filings give you until mid-June to actually file, but any balance owing — GST/HST or personal tax — starts accruing interest if it isn't paid by April 30. Filing late isn't the trap; paying late is.

Looking Ahead: Setting Up Next Year Now

The best way to make next year's checklist shorter is to build a few habits starting January 1:

• Set aside tax money as it arrives. Transferring 25–30% of every commission check into a separate reserve account as it clears means quarterly and year-end tax bills stop being a surprise.

• Log mileage in real time. A trip logged the day it happens is far more reliable — and far less work — than trying to reconstruct twelve months of driving in December.

• Check in mid-year. A projection of your gross commission income around July gives you time to actually act on it — timing a major equipment purchase, adjusting retirement contributions, or revisiting your entity structure — instead of discovering the number in April.

For agents consistently clearing $80,000–$100,000+ in net commission in the US, forming an LLC with an S-Corp election is a common next step, since it allows splitting income into a reasonable salary and distributions that aren't subject to self-employment tax. In several Canadian provinces, agents in a similar position can incorporate as a Personal Real Estate Corporation (PREC), taxing income left inside the corporation at the small business rate rather than a personal marginal rate. Both are structural decisions worth a real conversation with an accountant, not something to back into at year-end.

How AgentXpense Helps

Most of what makes year-end painful isn't the tax rules themselves — it's not knowing where anything is. AgentXpense keeps the pieces this checklist depends on organized as the year happens rather than reconstructed in December: commissions stay tied to the deal that produced them, with gross commission, brokerage deduction, and net pay all recorded separately so the three-way match in Step 4 is already done. Pre-construction tranches are tracked individually as they're received. Referral income sits in its own category from the start, separate from standard commission. Every expense carries a category, a tax type (None, Inclusive, Exclusive), and an optional receipt attachment, and the Reports page calculates your sales tax position — payable or refund — automatically from what's already been recorded. When it's time to hand everything to an accountant, Export and the bulk Download Receipts tool turn months of records into a clean package in a few clicks, instead of a folder that needs sorting first.

Final Takeaway

Year-end bookkeeping for a realtor isn't fundamentally different from any small business's — it's the same reconciling, categorizing, and reporting everyone does. What's different is the shape of the year: commissions that arrive unevenly, deals that straddle the calendar year, referral fees that need their own paper trail, and — for Canadian agents — a sales tax position that has to be calculated rather than assumed. None of it is complicated on its own. The complication comes from doing it all in the last week of December instead of throughout the year. A checklist followed consistently turns year-end from a scramble into a final review.

FAQs

When is the tax filing deadline for realtors in the US for the 2026 tax year?

Schedule C is filed alongside the individual return by April 15, 2027. An extension pushes the filing deadline to October 15, 2027, but any tax owed is still due by April 15.

When is the tax filing deadline for realtors in Canada for the 2026 tax year?

The T2125 and personal T1 return are due June 15, 2027, but any balance owing — including GST/HST — must be paid by April 30, 2027 to avoid interest.

Do I need to issue a 1099 or T4A if I paid a referral fee this year?

In the US, a Form 1099-NEC is generally required once referral or commission payments to an individual or unincorporated business reach $2,000 in the year (raised from $600 by the One Big Beautiful Bill Act, effective for 2026 payments), due by February 1, 2027. In Canada, a T4A slip with the amount in Box 048 is generally required once payments reach $500 CAD, due by March 1, 2027.

Should a closed deal from December be reported this year or next?

If the deal legally closed on or before December 31, the commission belongs to that tax year, even if the deposit doesn't arrive until January. A deal that doesn't close until January belongs entirely to the following year.

How do US and Canadian mileage deduction rules differ?

US agents can choose between the standard mileage rate or actual vehicle expenses, with some restrictions on switching methods. Canadian agents are required to use actual expenses prorated to business-use percentage — there's no standard per-kilometre rate available for the self-employed.

What's the difference between sales tax payable and a refund?

Payable means the tax you collected on commissions was more than the tax you paid on business expenses — you owe the difference. A refund position is the reverse: heavier business spending means the government owes you the difference.

How long should realtors keep tax records?

In the US, the IRS generally expects records kept for at least 3 years from the date the return was filed. In Canada, the CRA generally expects records kept for at least 6 years from the end of the relevant tax year.

Can AgentXpense calculate my sales tax position automatically?

Yes. Reports pulls together the sales tax collected on income and the sales tax paid on expenses across your chosen date range and shows the net payable or refund position, based on the tax type set on each transaction.