Hi everyone! Would welcome some advice about withholding taxes and passive losses against MAGI. I am trying to get my tax liability as low as possible this year by maxing out retirement accounts, I am also putting some upgrades into my rental house so I will show a loss this year. Not great for my monthly budget but good for my taxes and long term investment into the property. A couple of questions I have:
Does rental losses reduce my MAGI? I am right on the borderline between being able to deduct a traditional IRA (I have a 401K at work so it is down to income) and I am confused about whether passive losses will drive down my MAGI or just my AGI.
Also, right now I am looking at about an $8K refund, I currently withhold 10 (I also live in TX which doesn't have state income tax so I am just dealing with federal). I spoke to my HR department about upping my withholding number but they warned me against it but said I could do it if I really wanted to. Kind of a weird response.
Thank you for your help!