Self owned management company - taxes

[Walt B Philip]

I’m in process of learning how rental properties tax deductions work.  One item I see is properly management.

If I manage my own property, can I form a LLC as a property manager with myself as the employee? In essence I'd be paying myself to do the maintenance I'd otherwise do for free...then claim it as a tax deduction.. Does that fly?

[Bob Norton]

@Walt B Philip Yes, you can setup a separate property management company and charge your rentals a property management fee that you deduct on your rental income.  But . . . you will then have to claim the property management income on your Schedule C (or if you setup an S-Corp, then your W-2) and you will then pay a higher tax rate on that income, because you will also be paying self-employment taxes.

So, you'd be saving taxes at the lower rental rate, while paying taxes at the higher self-employment rates.  Not the best tax strategy, if you want to save taxes.

I recommend that if you manage your own properties, that you simply do that as a landlord and not have to pay any self-employment taxes.