RE tax questions from a noob

[Mark Stone]

Ok I have a few questions in regards to my taxes and am hoping someone could help answer them or point me in the right direction! Thanks in advance for any insight!

Due to my income falling between the $100-$150k, I am curious on how to increase the amount I can write off of the maximum $25k passive loss for active real estate investors (not sure if there is a term for this write off). 

Questions)

1.) If I contributed more money to my 401k would it lower my overall income that is viewed by this rule and therefore I could write more off?

2.) Currently if I work overtime I get paid 1.5x base pay, but I am wondering if someone can help me with the math of what I would roughly be making (1.4x, 1.3x etc.), since I would also be lowering how much I could write off the above rule (my OT wouldnt be extensive enough to have my income >$150k). This may not be feasible without more specifics on my taxes but perhaps a rough formula on how I could figure it out.

My basic thought process with the math would be the following:

For every extra $1.50 I make above $100k (but below $150k); I lose $0.75 I can write off.

So here is where my knowledge really breaks down (if it hasn't already unbeknownst to me).

So for every $0.75 I lose the ability to write off as a passive loss; will this cost me $0.75 or will it cost me $0.75 times my marginal tax bracket of 28%, which would be $0.75 x 0.28 = $0.21

And if it cost me $0.21 per $0.75 and therefore $0.41 per $1.5, that would basically bring my OT down from 1.5x base pay to roughly 1.1x base pay?

Thanks again for any insight!

Sincerely, 

Mark 

[John Woodrich]

I don't have time to answer all you questions but here is some help.

1.  Yes - if you make 401(k) contributions it will lower your Modified Adjusted Gross Income (MAGI) which is used to calculate the phaseout.

2.  I don't understand what you are asking here.  It sounds like you get overtime pay, and you are trying to figure out how much your are actually receiving if you are losing RE deductions??  I don't understand the purpose, if you only made 1.4 times instead of 1.5 times would that stop you from working OT???

3.  Your rental income will definitely count.  You will have to calculate your gross rents, less your expenses, etc.  Then if you end up negative you can potentially use this towards the $25,000 write off.

I am giving you general advice as I don't know your tax situation.