The Money Mustache Community
Learning, Sharing, and Teaching => Ask a Mustachian => Topic started by: hyenas on June 10, 2014, 11:36:46 AM
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Hello, I'm new to this website but not to the ideals. I live a very low-key low-income life with my kids. We happily manage on about 15,000 a year in expenses. I have savings, retirement, and no debt beyond one 1%-interest loan for about 3,000 (which I could pay off, but I'd rather pay the minimum and invest in something higher yield).
I have two rental properties and work about two days a week at a job I don't mind going to.
Here's the thing. My rental income doesn't count as earned income. Which means that when file taxes my earned income is really low, about 8000. Which means that I only qualify for the minimum EITC.
I'm looking for some way to turn my rental income into earned income. I have no idea how to do that. Do I need to make an LLC and then employ myself? Do I just start reporting the income as self-employment? If I do that then can I no longer take the rental property deductions?
I'd rather not make an LLC, the rental properties aren't worth that much and the license fees would really hit my income. In the end, it probably wouldn't be worth it. Even if I got sued, my income is so low that nothing would come of it. I also rent to low-income households, that frankly, couldn't pay a lawyer in the first place.
Any ideas?
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Actually the LLC license fees in Oklahoma are only about $35 a year. So. Disregard the final paragraph. I'm open to LLCs.
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LLC income is pass through - it wouldn't qualify as self employed earned income.