All Forum Posts by: Paul Passafiume

Eamonn,

I don't understand how the IRS knows what to "withhold?"  Wouldn't that depend on the household income? For example, it may appear my wife will only make 1000 a month but that doesn't consider 99% of income comes from my jobs...

Hello folks, without getting in the weeds, I was hoping a CPA or tax lawyer can help out. 

I make about 360k on a 1099, 30k in net real estate income, and 86k on a W2 which has taxes withdrawn. I max out my SEP IRA, 401K, and HSA to reduce my tax burden. I get health insurance through my W2 and last year I itemized about 27k in different expenses. I have maybe 4k in other/interest income. My wife has decided to get a very part time job. She will make about 5k this year, maybe 12k next year (she is a stay at home mother full time, much more difficult work).

I am kind of confused on how to fill out her W-4. Her employer will take out taxes but if we are married filing joint, would 2 be a safe number to put?  I did the worksheet and it was a bit higher but I think we will put 2. We aren't desperate for the money and I just want to make sure we will not owe taxes on her earnings in April. 

Without going into detail, how does the IRS know to tax her much higher than just a regular person making so little money which would be below the poverty line alone?  Is it even an option to only withhold 1 on her W4 even though we are MFJ?  I should add I of course realize the idea is to withhold less so you can get your money faster but a nice refund on her earnings will help discipline us to save for a nice vacation for Spring Break!

Thanks!

I am claiming the QBI. I own 12 units in a single member KY LLC. I manage them on my own and some units require a ton of management. One 4 plex even requires bimonthly rent management and I function as the handyman for lots of minor stuff. The safe Harbor is not required however if you spend 5 hours a week doing the above he listed, you qualify. I know I sure do.

My main job is a 1099/W2 hybrid as a physician. I am also claiming the QBI on the 1099 physician income. Any similar folks here who are professionals such as physicians who are claiming QBI on their 1099 and also real estate investments?

If I am going to be turning a profit over 25,000 on my rental portfolio this year as a single member pass through LLC, am I required to make LLET estimated tax payments? FYI, my rental income is treated as a pass through entity and is taxed as 1099 income on my overal return (of which I pay estimated state taxes quarterly). Is the LLET tax separate and additional?

Ok....so I am MFJ, and my AGI is 300k to keep it simple. If I am an IC physician and that is my main trade/skill, but my other trade and skill is real estate (I typically spend 3 days a week involved in each), is that a QBI as a doctor?

It's EXTREMELY confusing and very poorly written law. The thing that raises red flags is my CPA last year must not have planned for me to get that deduction because he waaaaaaaay overestimated my taxes. Thus it looks as if I am owed a massive refund due to the QBI.

This new QBI tax break is great but very confusing. Here's the deal. My main day job is as a 1099 IC doctor. I am actively involved in real estate investment and self manage my 11 units, interacting with tenants often. I definitely took the QBI for my real estate activity as I am actively involved, including in accounting for them, deposits, tenant interaction, even some maintenance or fielding the maintenance out (real estate in sole member LLC)

For 2018 taxes, do both jobs count as QBI? The physician job I am paid an hourly rate that includes malpractice. Once I deduct the malpractice and get my SEP, HSA, and other deductions, I fall below the married filing joint threshold of 315k. 

Any CPAs out here specialized in working with doctors? I do have my own CPA but he seems to be confused on this himself and told me he needs to research it. I am thinking about switching to a CPA who specializes in working with doctors. 

Can I take the 20% QBI deduction as a physician employed as an IC in my own name since that is my own trade? There seems to be some confusion as to whether healthcare is excluded from the QBI criteria....

Agree that's DIRT cheap. Even here in Louisville anything like that in an average area sells for 500k.  Buy it

I'm no novice or "rookie" as you guys implied. And no offense to realtors, but I know this market much better than 99% of them. I know what people want and have done several flips. I retain 15 rental units.

I have a trusted GC but we've never done new construction other than taking an old home to studs.

So...when people do new construction, what insurance would you use for a duplex during the construction phase?  No one in this market is using fire separation between duplexes and Landlord insurance does not require it.

Ok, here's the deal. Louisville is still a red hot real estate market especially in the urban core but we've gotten to the point here the best neighborhoods have been gentrified and all the old housing stock has mostly flipped. Louisville took a bit longer because it has such a dense pre 1930 housing stock.

I just bought a couple infill lots and want to develop them. Anyone built multifamily from the ground up? What is the cost in your area for a "Home Depot" grade renovation?

And my main question..how do you go about it? I have a good GC but I worry there's lots of risk and would need to purchase "Builder's Insurance." Can that be bought for a small property like a duplex? Could I, for example, purchase a policy on a duplex I plan to build for like 150k? How much would Builder's Insurance be in general and who sells it?

Folks in Nashville, Denver, and Austin may be of most help here. Louisville is starting to see a nice uptick in infill in what few lots are left in good neighborhoods (Strict preservation city so not many tear downs allowed).  Also, if you are interested in any opportunity here, I am your guy. Besides the fact that our state isn't as sexy, Louisville has all the potential to be the next Nashville or Austin, just more historic and gritty.

Originally posted by @Stanley Bronstein:

@Paul Passafiume You definitely need to write them a letter.  All communications should be in writing so that they are documented. You will pretty much almost never get this type of problem resolved over the phone.

Even better, have your CPA write the letter.

I wrote the letter. I had to take a bit of a personal stab at them in the last paragraph, basically stating I lost a whole day of time and wages (true), and this is part of what makes KY not friendly for business (also true).  

But the gist of my letter states I'd like anything marked 2016 to apply to 2017 and I blamed their computers for the error. I argued since they had the money all along, I don't owe interest or penalties. I then provided receipt of payments with email confirmations from 2017 plus bank statements to show the money left my account to their bank. If they don't waive it, I am going to make a big stink about it, mostly out of principle. But sure, the penalties would smart too.