I am ready to go look for a broker now and start working in RE. I know I would have a start-up costs and I would like to deduct them on this year (2008) tax return because I was working for 9 month this year and we paid a lot of taxes this year, would like to have some of it back. Do I have to actually start working for a broker before the end of the year to be able to do that? If I start working in January can I deduct start-up expenses on 2008 tax return? And what can I deduct? Probably office expenses, MLS, phone, mileage and such? Can I buy a new laptop and deduct it? How about a new clothes?
I searched topics for this info but couldn't find much, I really would like to take a vacation and start interviewing after the New Year but if I have to I can hurry up and start doing it right away. I would really appreciate your advice.

You need to sit down with a CPA/tax accountant/tax attorney familiar with real estate to review your specific situation. General rules -
the cost of education for a new occupation is not a tax deduction,
certain assets can be expensed in the year of purchase up to a dollar amount (a laptop should qualify but a car probably won't),
uniforms that cannot be worn for any other purpose can be expensed - street clothes can't
agents/individuals do their taxes on a cash basis so you have to pay the expense the year you deduct it (prepay your costs in December or use them when you file for next year)

Since you aren't affiliated with a broker and actively engaged in your new career now, I'm not sure what affect that has on taxes so, again, seek the advice of a qualified professional. Do not rely on the word of some faceless erson on an internet forum.

You will find that you can deduct many items from the income that you earn in this profession. But if you're just getting started, there isn't anything yet to deduct "from". Plan on carrying forward a loss from your first year(s) into future years when you may have income to offset.

The way it usually works is first, you get cracking and make some Commissions or Fees; then you can reduce the sum of the Commissions by some of your expenses.

Otherwise, I agree with TxFred above. Talk to your CPA or Tax Advisor.

Don't expect the IRS to allow you to deduct monies spent in this profession from income you earned in another. They are all very nice people down there at the Internal Revenue Service . . . . but not that NICE !