出租房在LLC名下给自己开工资上在什么情况下是划算的

有人问是不是可以从LLC名下的租金收入里给自己开工资. 这里面有几个考虑.

If you do pass through the rental income is added to gross income and taxable.

1.  You want to tax-defer this income by setting up an SEP 401k. Read related document to learn how to do it. But be aware you must have sufficient documentation of activities involved and time spent for this EARNED INCOME, which is subject to Self Employment Tax.

2. You need to get enough points to qualify Social Security. Now, if you haven't get the minimum of 40 points, there is nothing to say, just keep working on that. However, if you already got the 40 point, you need to use the following magic number to figure out whether you want to report anymore income as Earned Income(EI)

For each dollar you report as EI, you pay 16cents to SS+MED. The amount of income you will receive from SS is determined by the Average Indexed Monthly Earnings(AIME), which is basically your averaged income through the 35 years prior you stop working. The pay off schedule based on AIME is not flat; people earned more didn't get their money back as their SS tax is used to subsidize those who earned less. If this number is low (say less than 10k a year) your 16 cents paid will generate 3 cent (90/35) per year for the rest of your life.

Well, you probably are not going to live collecting SS for 35 years... So say you do it for 20 years, you get way more that you pay(total 60 cent vs 16cent paid).

But if your AIME is high, say above 50k a year, sorry, your 16 cent can only bring you as low as half a cent (15/35) per year, so the total is 10 cent vs 16 cent.

Between AIME 10k and 50k, the return is 20 years x (32/35) = 20 cent paid for every EI reported (or 16 cent SS+med paid), so you are basically ok.

OK, go back to do your number to see if you still want to report EI...