Updated almost 4 years ago on .
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Should I convert some of my passive income to active?
All of my income is passive from rentals. Therefore I do not pay any self employment taxes (15.3%). Since I have no active income, I cannot contribute to any retirement accounts.
Does it make sense to convert some of the income to active by forming a property management company. Taking a salary and using this active income to fund IRAs, Coverdell ESA or an HSA?
The new salary would be subject to the 15.3% SE tax. Is there an income bracket or income threshold that makes it beneficial?