Tax Smart Real Estate Investors Podcast

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

14 snips
Oct 1, 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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