The Money Mustache Community
Learning, Sharing, and Teaching => Real Estate and Landlording => Topic started by: rothwem on May 15, 2019, 08:32:10 AM
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I've got a duplex rental property that I've been actively managing. Its 250 miles away, but most stuff can be taken care of over the phone or the internet. However, I've got a couple projects that I've DIY'ed that basically took the whole weekend each time I went there. I obviously plan on deducting the cost of the materials and the miles driven, but how does deducting your own labor hours work?
In my W2 job, I make ~$45/hour (roughly based off of my salary), so that probably costs my workplace ~$75/hour? Is that what I should tell the IRS I paid for labor cost? Or should I say $100/hour, a nice round number? How do I justify my hourly labor rate?
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You don't want to do that. You would be needlessly paying Self Employment taxes on that income. You just report (potentially) more income on Schedule E (profit/loss from rental) from the savings of having done the work yourself.
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You don't want to do that. You would be needlessly paying Self Employment taxes on that income. You just report (potentially) more income on Schedule E (profit/loss from rental) from the savings of having done the work yourself.
Ah. Yeah that makes sense. /thread
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You don't want to do that. You would be needlessly paying Self Employment taxes on that income. You just report (potentially) more income on Schedule E (profit/loss from rental) from the savings of having done the work yourself.
I agree - I do not pay myself when I am making repairs and I have the benefit of getting paid later from increased profits in the property. Last thing I want to do is have to keep up with a 1099, self employment tax, medicare/social security tax, etc
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For tax purposes, zero.
For purposes of calculating your investment returns, whatever your weekend time is worth to you ($150 an hour is probably what I'd pick).
Self-managing can make a rental look *really* bad as an investment quick if you're DIYing and driving long distances to do it.
-W
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For tax purposes, zero.
For purposes of calculating your investment returns, whatever your weekend time is worth to you ($150 an hour is probably what I'd pick).
Self-managing can make a rental look *really* bad as an investment quick if you're DIYing and driving long distances to do it.
-W
Well last year about $35,000.
I bet I work about <8 hours a week. So about 80-100 bucks an hour.