Contrib to IRA
Click here for Top Ten Discussions. CLICK HERE for Q & A Homepage
Receive Free Rental Owner Updates Email:  
MrLandlord Q & A
     
     
Contrib to IRA (by Lucy [IN]) Jul 20, 2021 7:17 PM
       Contrib to IRA (by JB [OR]) Jul 20, 2021 7:40 PM
       Contrib to IRA (by Robert J [CA]) Jul 20, 2021 8:01 PM
       Contrib to IRA (by Bonanza [NC]) Jul 20, 2021 8:04 PM
       Contrib to IRA (by DJ [VA]) Jul 20, 2021 8:04 PM
       Contrib to IRA (by GKARL [PA]) Jul 20, 2021 9:51 PM
       Contrib to IRA (by WMH [NC]) Jul 21, 2021 7:57 AM
       Contrib to IRA (by Marv [IL]) Jul 21, 2021 8:21 AM
       Contrib to IRA (by Barb [MO]) Jul 21, 2021 10:32 AM
       Contrib to IRA (by Ray-N-Pa [PA]) Jul 23, 2021 9:12 AM
       Contrib to IRA (by Small potatoes [NY]) Jul 23, 2021 11:07 PM

Click here to reply to this discussion.
Click Here to send this discussion to a friend

Contrib to IRA (by Lucy [IN]) Posted on: Jul 20, 2021 7:17 PM
Message:

I was wondering if you can contribute to an IRA when your income is made up of some low W2 income and higher rental income (LLC). My tax person is saying he marks me as a Real estate Professional so I can contribute. Which I did...but now I am thinking that may have been incorrect advice and I need to withdraw some from the IRA.to avoid a 6% excise tax on the over contribution.

--69.160.xxx.xxx




Contrib to IRA (by JB [OR]) Posted on: Jul 20, 2021 7:40 PM
Message:

I believe you are correct in your assumption. Rental income is not considered "earned." --73.25.xx.xxx




Contrib to IRA (by Robert J [CA]) Posted on: Jul 20, 2021 8:01 PM
Message:

With one large partnership property, I paid myself a monthly salary via a check from the buildings bank account. On that income I had to pay Self Employment Tax. Therefore I could put a percentage of those funds in an IRA account. --47.155.xx.xxx




Contrib to IRA (by Bonanza [NC]) Posted on: Jul 20, 2021 8:04 PM
Message:

This is not advice but I think you can have your LLC taxed as a S corp, pay yourself a w-2 and then get the stuff you are looking for that way.

Ask your accountant --65.188.xxx.xxx




Contrib to IRA (by DJ [VA]) Posted on: Jul 20, 2021 8:04 PM
Message:

How it was explained to me was:

You need just enough W2 income to equal the amount you contribute to the IRA. --68.229.xxx.xxx




Contrib to IRA (by GKARL [PA]) Posted on: Jul 20, 2021 9:51 PM
Message:

You can pay yourself a management fee and get a 1099 from your real estate business for that. As someone mentioned, you'll pay the SE taxes on that, but that would count as earned income for the purposes of funding an IRA. --209.122.xx.xxx




Contrib to IRA (by WMH [NC]) Posted on: Jul 21, 2021 7:57 AM
Message:

DJ is right. --50.82.xxx.xxx




Contrib to IRA (by Marv [IL]) Posted on: Jul 21, 2021 8:21 AM
Message:

You can deduct the larger of max ira deduction for year or wages received. --67.184.xxx.xxx




Contrib to IRA (by Barb [MO]) Posted on: Jul 21, 2021 10:32 AM
Message:

Just how low is the W2 income?

If you earn $6000 in W2 income in 2021, you should be able to contribute $6000 to an IRA, either Roth or traditional. If you are 50 or older, you can contribute $7000 so long as your W2 income is at least $7000.

If you earn under $6000 on your W2 then the max you can contribute is the $6000, UNLESS you either make yourself a W2 employee of the S-Corp that owns the rental or your pay yourself the management fee and get a 1099 from your real estate buisness. That would allow you to pay the SE taxes and deposit the max into the IRA.

If your tax person marked you as a real estate professional, then you SHOULD be paying self-employment taxes on the amount earned while working as a real estate professional, which will allow you to contribute the max based on your income to the IRA.

Without seeing your taxes, none of us can know your EXACT situation. --149.76.xxx.xx




Contrib to IRA (by Ray-N-Pa [PA]) Posted on: Jul 23, 2021 9:12 AM
Message:

Barb is spot on.......

Most investors forget about the "why"

Why are you investing - and if it is for retirement purposes, then you need to create earned income from passive income. Give yourself a small paycheck - one which you have to pay self employment tax on, then set yourself up with a roth solo 401K account if you are a one person show. If you have a couple of part timers, set up a simple account.

Hey guess what, your LLC can match your contribution if it is a 401K. So I would be more focused on that then the IRA account.

Also if your spouse has a earned income you can qualify for a spousal IRA.

In summary though - remember the WHY first --24.101.xxx.xxx




Contrib to IRA (by Small potatoes [NY]) Posted on: Jul 23, 2021 11:07 PM
Message:

I'm gong to guess that your tax preparer has you categorized incorrectly. It's hard to be a re professional. Not the same thing as qualifying for safe harbor rules. Even some agents and brokers don't qualify. And if your s Corp or llc has a pertner then you have to be the active one and being a majority partner isn't a decisive indicator. You also mention w2 income, that is an indication that re is not the primary duty. --172.58.xx.x



Click Here to send this discussion to a friend
Report discussion to Webmaster


Reply:
Subject: RE: Contrib to IRA
Your Name:
Your State:

Message:
Contrib to IRA
Would you like to be notified via email when somebody replies to this thread?
If so, you must include your valid email address here. Do not add your address more than once per thread/subject. By entering your email address here, you agree to receive notification from Mrlandlord.com every time anyone replies to "this" thread. You will receive response notifications for up to one week following the original post. Your email address will not be visible to readers.
Email Address: