Commission income is lumpy. One month you close three deals, the next you're covering MLS dues out of pocket while a deal drags through inspection. The account under that cash flow needs to do a few specific things: receive brokerage ACH splits without a fee, let you set aside self-employment tax the day a commission lands, and export cleanly to QuickBooks when April shows up. A business account for a real estate agent should support commission deposits, tax set-asides, accounting exports, and the occasional paper check; Novo fits that workflow but does not accept cash deposits.

Novo is a financial technology company, not a bank. Banking services are provided by Middlesex Federal Savings, F.A., Member FDIC.

Why Real Estate Agents Need a Dedicated Business Bank Account

Licensed real estate agents are often treated as 1099 independent contractors when they meet the IRS statutory-nonemployee criteria, rather than as W-2 employees of their brokerage.

The brokerage doesn't withhold taxes from your commission — you do, on your own, from a business account you control.

Three things break when you run realtor income through a personal checking account:

LLC protection weakens. If you formed an LLC, mixing business commissions with personal spending can weaken the separation between you and the business account for LLC owners, which may matter in a lawsuit. Commingling is one of the factors courts look at when a plaintiff argues an LLC was never really separate from its owner. A dedicated business account, distinct from personal checking, is the paper trail that keeps that separation clean.

Schedule C becomes a weekend project. Commissions in, MLS charges out, staging invoices, mileage reimbursements, board dues, E&O premiums — all of it belongs on Schedule C. If it's already segregated in one business account, your Schedule C is a CSV export. If it's tangled with Netflix and DoorDash, it's hours of forensic accounting.

Brokerage ACH deposits need somewhere to land. Most brokerages pay commission splits electronically through the ACH network.

You need a business account with routing and account numbers ready on day one, not a personal or joint checking account.

What to Look for in a Business Checking Account for Realtors

The realtor use case is specific enough that generic "small business checking" checklists miss the point. For realtors, the account should cover these requirements:

• No monthly fees and no minimum balance. Commission income doesn't smooth out. A slow quarter shouldn't cost you $15 a month in maintenance fees on top of everything else.
• Free incoming ACH. Your brokerage's commission split should land in full, without an incoming ACH fee deducted from the deposit.
• Expense categorization tuned to real estate line items. MLS dues, NAR and local board fees, staging, mileage, marketing, and closing gifts should tag cleanly, not force you to hand-code every transaction.
• QuickBooks and Xero integration. If you or your CPA use accounting software, the account needs to talk to it. Manual re-entry defeats the point.
• Sub-accounts for tax set-aside. Moving a percentage of every commission into a tax bucket the day it hits can help a self-employed realtor stay ready for quarterly payments and April filing. If your app makes that one tap, you'll actually do it.
• Mobile check deposit. Referral checks and the occasional rebate still arrive on paper. You shouldn't need to drive to a branch.

How Novo Fits a Real Estate Agent's Cash Flow

Novo Business Checking has no monthly fees and no minimum balance requirement. Incoming ACH is free, so a $6,000 commission split from your brokerage arrives as $6,000.

The feature that matters most for commission income is Novo Reserves. Novo Reserves let you split your balance into up to 20 named buckets inside the same account. Novo Reserves is not a separate account. Novo Reserves is a budgeting feature within the Novo checking account. All funds within Reserves remain a part of the overall balance of the Novo checking account. The workflow: when a commission lands, you open the app and route 25% to a "Taxes" reserve, 10% to "Marketing," and 5% to "MLS and dues," or whatever split your CPA recommends. If you want to see how other self-employed operators use the same feature, our guide to business sub-accounts for taxes and payroll walks through the mechanics.

Novo integrates with QuickBooks and Xero, so Schedule C prep is an export rather than a rebuild. It also connects to Stripe and Shopify if you take payments for coaching, courses, or a side business. Invoicing is unlimited and built in, which is useful for referral fees, consulting on flips, or any income that doesn't come through the brokerage.

The application is online. Sole proprietors can apply with an SSN or EIN; LLCs apply with formation documents and an EIN. The online application is designed to be completed quickly.

Deposits are insured for up to $250,000 through Novo's partner bank, Middlesex Federal Savings, Member FDIC.

For more on how coverage limits work across ownership categories, see our explainer on FDIC insurance for a business account.

The One Tradeoff: No Cash Deposits

Novo does not accept cash deposits. This should be a headline, not a footnote.

For agents paid by brokerage ACH, cash deposits usually are not part of the workflow. Commission splits, referral payments from other agents, and rebates almost always come electronically or by check. If you regularly collect cash, such as rental income from a side business, pair Novo with a cash-accepting account and transfer funds electronically after deposit.

Novo is a business checking account for the agent's own business. Novo does not accept cash deposits, and Novo should not be used as a broker trust or escrow account for client earnest money. If you're a broker who needs to hold client funds, use a bank that offers a real estate trust account under your state's escrow rules.

How Do 1099 Real Estate Agents Handle Taxes?

Set aside self-employment tax from every commission before spending it on operations.

That's on top of federal and state income tax. Most self-employed realtors set aside 25% to 35% of net commission, depending on federal bracket and state income tax. Your CPA can dial in the exact number. Novo Reserves is the mechanical way to do it: every commission, one tap, into the Taxes bucket.

Quarterly estimated tax payments are due mid-April, mid-June, mid-September, and mid-January. Missing them can trigger underpayment penalties even if you settle up in April.

What's deductible on Schedule C:

• MLS access fees and lockbox dues
• NAR, state association, and local board dues
• E&O (errors and omissions) insurance premiums
• Business mileage for showings, open houses, client meetings, and inspections
• Home office (if you meet the exclusive-use test)
• Marketing: signs, photography, digital ads, print, mailers
• Continuing education courses required for license renewal
• Closing gifts, subject to IRS limits
• Cell phone (business-use percentage)
• Broker desk fees and transaction fees

Business mileage is often the largest deduction for a working agent.

Check the IRS website for the current-year rate before you file, since it's updated annually.

Keep every commission deposit and every business expense in one account, and Schedule C prep becomes a straightforward export instead of a shoebox reconstruction.

How to Open a Business Account as a Real Estate Agent

The order of operations matters. Do these in sequence:

1. Decide on entity structure. A sole proprietorship is the default: no filing, no formation cost, and no liability shield. A single-member LLC adds liability protection and costs $50 to $500 depending on your state. If your commission income is consistently high enough to support payroll, bookkeeping, and filing costs, talk to a CPA about whether an S-corp election makes sense.

2. Get an EIN from the IRS.

Even sole proprietors should get one to keep their SSN off vendor W-9s and off their account application.

3. Gather formation documents if you have an LLC. You'll need Articles of Organization (filed with your state) and an Operating Agreement (drafted, even if you're the only member). Sole proprietors do not need formation documents; an SSN or EIN plus ID is enough. A full business checking account requirements checklist covers exactly what to bring to the application.

4. Apply for Novo online. You'll need your EIN, business details (address, industry, ownership), and a government-issued ID.

Below is a plain-text template you can paste into ChatGPT or Claude to generate a first-draft Schedule C worksheet.

Build me a Schedule C expense worksheet for a self-employed real estate agent with the following structure:

Columns: Date | Vendor | Category | Amount | Business % | Deductible Amount | Notes
Rows: at least 50 blank entry rows.

Categories to include as a dropdown validation list:
- MLS dues and lockbox fees
- NAR / state / local board dues
- E&O insurance
- Business mileage (miles, not dollars — separate tracker)
- Marketing and advertising
- Signage and photography
- Continuing education
- Closing gifts (cap at $25 per client per year)
- Home office
- Cell phone (business %)
- Broker desk / transaction fees
- Software subscriptions (CRM, DocuSign, etc.)
- Travel and meals (50% rule)

Add a summary tab that sums Deductible Amount by Category and shows a running total for the year. Add a second tab for mileage: Date | Purpose | Start Odometer | End Odometer | Miles | Rate | Deduction, with Rate defaulted to the current IRS standard mileage rate.

Paste the prompt into ChatGPT or Claude to generate the worksheet structure, then copy it into Google Sheets or Excel.

How Does Novo Compare With Traditional Business Checking for Realtors?

Most agents comparing options are choosing between a fintech account like Novo and a legacy business checking account at Chase, Bank of America, or Wells Fargo. Compare the accounts on cash deposits, fees, ACH, tax reserves, and accounting integrations.

Traditional big-bank business checking gives you a branch, which is useful if you deposit cash. Most agents don't. Big-bank business checking accounts typically carry monthly fees that can be waived with minimum balances or transaction activity — Chase Business Complete Banking, for example, lists a $15 monthly service fee that can be avoided by meeting one of several qualifying criteria. Fee schedules vary by bank, so check the current pricing page for the account you're comparing.

Novo trades the branch for no monthly fees, free incoming ACH, Reserves buckets for tax set-aside, and QuickBooks and Xero integrations. The tradeoff is cash deposits, which most realtors don't need.

If you deposit cash weekly, a traditional bank is probably the better fit, or run both. If your income is ACH commission splits and the occasional paper check, Novo is built for the workflow you actually have.

Frequently Asked Questions

Do I need an LLC to open a business account as a real estate agent? No. Sole proprietors can open Novo with an EIN (recommended) or SSN. An LLC adds liability protection and can help with tax planning at higher income levels, but it isn't required to bank as a business.

Can I deposit a commission check from my brokerage into Novo? Yes. Use mobile check deposit in the Novo app for paper checks, or have your brokerage send commission splits by ACH directly to your Novo account and routing numbers. Novo does not accept cash deposits.

How do I separate broker commissions from referral income in one account? Use Novo Reserves to route portions of each deposit into named buckets like "Brokerage commissions," "Referral income," "Coaching," and "Taxes," then tag transactions by category so QuickBooks or Xero picks them up on the right line of Schedule C.

Is Novo good for real estate teams or just solo agents? Novo is built for the individual agent's business. Teams that need shared sub-accounts across multiple licensed agents, or brokers who need trust and escrow accounts to hold client earnest money, should use a bank that offers those specifically.

What percentage of my commission should I set aside for taxes? Most self-employed realtors set aside 25% to 35% of net commission, depending on federal bracket and state income tax. A CPA can dial in your exact number. A simple workflow is to move that percentage into a Novo Reserves "Taxes" bucket the same day the commission lands.

Does Novo pay interest on my balance? Novo Business Checking is a non-interest account. Agents who want to earn yield on tax reserves or savings often keep the operating balance in Novo and park longer-term savings in a separate high-yield account.

What if I already have a personal account I've been using for real estate? Open the business account first, redirect commission splits from your brokerage, then move recurring business subscriptions (MLS, CRM, DocuSign, board dues) over one at a time. Give yourself 60 days of overlap so nothing bounces.