Do Pasive Losses Offset What I Owe for SSI Tax When Self Employed

[Daniel Dietz]

Hello BP Members,

So far I have been doing my Buy-n-Hold investing inside of my SDIRA so have not had to worry about the 'tax efficiency' of things so far. 

But, I am planning on buying some properties conventionally in the near future and have been looking at the tax benefits/efficiency of the potential passive losses in regards to my tax situation.

In my 'day job' I am self employed. Having recently done my 21015 taxes in reminded my what a huge bite SSI taxes are since I have to pay around 15% when both halves are figured in. I am at the top end of the 15% federal rates so the SSI was a bigger hit by far than the federal and state put together. 

I am wondering if I am figuring things right? Let's assume:

• 35K Self Employed Income
• Negative $5000 Rental Income after Depreciation is figured in

Would this not then lower the amount of income that I would have to figure ALL taxes on, including SSI, Federal, State, etc...? 

Part of what got my thinking a a little bit perked up is that figure goes from about 20% up to about 35% when figuring the SSI in there.

Is it also correct to assume that real estate investors that are NOT self employed dont really get any benefit even on the 50% of the SSI they have paid in since it has already been taking out of thier paychecks and there is not (to my limited knowledge) a way to lessen that by having passive losses?

Thanks, Dan Dietz