Congratulations on your new investment!
Owning rental properties will undoubtedly impact your tax liability at the end of the year. To prepare, I recommend calculating your taxable profit from the investment property. If you anticipate a gain, you can either adjust your paycheck withholding or make estimated quarterly payments directly to the IRS—the latter option provides greater flexibility in adjusting payment amounts.
Below are useful tools, informational resources, and IRS links to help you manage your rental property taxes:
-
Rental Property Income Calculator & Depreciation Calculator – Various online tools can help you calculate your net income, factoring in rental earnings and depreciation.
-
Understanding Rental Income Taxation – Rental income is generally classified as passive income for tax purposes, even if you actively manage the property. Losses from rental properties typically offset only other passive income, not active income like wages or business earnings.
-
TurboTax Rental & Real Estate Tax Guide – A collection of articles that explain how rental properties are taxed and offer guidance on managing deductions.
-
IRS Tax Withholding Estimator and TurboTax Calculators & Tools – These tool helps determine how much tax you owe based on your income, deductions, and credits.
-
IRS Estimated Tax Payments – If you prefer not to adjust paycheck withholding, you can pay estimated taxes directly to the IRS.
By planning ahead and utilizing these resources, you can better manage your tax obligations and avoid surprises at tax time.
Good Luck!
**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"
