Wholesaling and taxes

3 Replies

Hey all, I’m working on wholesaling right now and to be honest I don’t know much about taxes. I’ve only had to do my taxes once or twice and only through turbotax and such. Is there a certain percentage of my wholesaling profits I should expect to pay for taxes?

Wholesaling is subject to ordinary income tax rates. Under current tax law, the highest marginal tax rate for ordinary income is 37%. Wholesalers are also generally subject to self-employment tax, although there are strategies to minimize these taxes.

@Carter Bushman

The classic strategy of reducing SE taxes (Social Security and Medicare) by restructuring as an S-corp and starting to pay yourself W2 salary, as implied by @Daniel Hyman , is significantly undermined by the new tax reform. It can still be beneficial, but much less than before.

Discuss it with your tax person, assuming that he/she understands the new law.

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