Deducting Business Expenses & the Standard Deduction

[Navid A.]

If you're employed with a W2 Salary and are investing in rental properties under a LLC (disregarded entity), would you even be able to make deductions if they add up to be less than the standard deduction on your personal return, $24k in my case as I file a Married, joint return?

With only a few properties, I doubt I'd come close to breaking the $24k standard deduction threshold. Am I missing something?

Thanks!

[Ashish Acharya]

Originally posted by @Navid A.:

If you're employed with a W2 Salary and are investing in rental properties under a LLC (disregarded entity), would you even be able to make deductions if they add up to be less than the standard deduction on your personal return, $24k in my case as I file a Married, joint return?

With only a few properties, I doubt I'd come close to breaking the $24k standard deduction threshold. Am I missing something?

Thanks!

1) The business deduction has nothing to do with the standard deduction. 

2) You deduct business expenses against business income. If there is a loss, and there are no restrictions on the deductibility of the loss, you get to deduct the loss on top of the SD. 

Let's say you have 100k W-2 income. 

Your business revenue is 20k and expenses is 30k = net loss of 10k

You get to deduct your 25k SD and also 10k loss against your income, again assuming there are no limitations on deducting on your business loss. 

That's how it normally works.