347. W-2 Tax Strategies in 2025: What's Actually Working

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Sep 30, 2025

Dive into the complexities of W-2 taxation and discover why it's challenging to offset high-income earnings. Explore Section 469 passive activity rules and how achieving real estate professional status can benefit you. Learn about the $626,000 Excess Business Loss limit and how to generate non-passive losses from active businesses and oil & gas investments. Uncover strategies to stack charitable deductions with business losses and avoid dubious tax schemes for a smarter financial future.

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INSIGHT

W-2 Income Is Hard To Offset

W-2 income is taxed at ordinary rates including federal, state, and FICA which makes it highly taxed.
You generally cannot offset W-2 income with employee expenses like a business owner can.

INSIGHT

Passive Loss Rules Limit Rental Deductions

Section 469 makes rental real estate losses passive by default, so they only offset passive income.
Depreciation creates non-cash losses that can reduce taxable income without hurting cash flow.

ADVICE

Plan Around The $626K EBL Cap

Remember the Excess Business Loss (EBL) cap: in 2025 married couples can only use $626,000 of business losses against other income.
Any excess loss carries forward as a net operating loss to future years.

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In this episode of the Tax Smart REI Podcast, hosts Thomas Castelli and Ryan Carriere dive into one of the most-requested topics from high-income investors and professionals, W-2 tax strategies. Tune in to learn: - Why W-2 income is so highly taxed and the biggest obstacles to offsetting it - How Section 469 passive activity rules work and proven ways to navigate them with real estate professional status (REPS) or short-term rentals - How the $626,000 Excess Business Loss (EBL) limit applies to high earners and how to strategically plan around it - Ways to generate non-passive losses through active businesses and oil & gas investments - How to stack charitable deductions (like donor-advised funds, CRTs, and CLTs) on top of business losses for maximum impact - Traditional but powerful tactics, including 401(k)s, HSAs, SALT deductions, and capital loss harvesting - Which “too-good-to-be-true” tax schemes to avoid and how to spot them before they get you audited This comprehensive breakdown gives you a complete view of W-2 taxation. To become a client, request a consultation from Hall CPA, PLLC at go.therealestatecpa.com/3KSEev6 Subscribe to REI Daily & Enter to Win a FREE Strategy Call: go.therealestatecpa.com/41JuQBX Connect with Eckard Enterprises: eckardenterprises.com/taxsmartrei/ The Tax Smart Real Estate Investors podcast is for general information purposes only and is not intended to provide, and should not be relied on for, tax, legal, or accounting advice. Information on the podcast may not constitute the most up-to-date legal or other information. No reader, user, or listener of this podcast should act or refrain from acting on the basis of information on this podcast without first seeking legal and tax advice from counsel in the relevant jurisdiction. Only your individual attorney and tax advisor can provide assurances that the information contained herein – and your interpretation of it – is applicable or appropriate to your particular situation. Use of, and access to, this podcast or any of the links or resources contained or mentioned within the podcast show and show notes do not create a relationship between the reader, user, or listener and podcast hosts, contributors, or guests. Any mention of third-party vendors, products, or services does not constitute an endorsement or recommendation. You should conduct your own due diligence before engaging with any vendor.