In addition to my original response above, if your plan is to use this property for rental and the property is expected to generate significant net income, you want to avoid underpayment penalties and prefer to have more tax withheld from each paycheck instead of paying quarterly estimated taxes, then you must:
1 Use the IRS Tax Withholding estimator (https://www.irs.gov/individuals/tax-withholding-estimator)
include expected rental income and expenses under "other income."
2- Update your W-4
Step 4(a) Other income: enter expected net income (rental income- expenses);
or use Step4(c) to have an additional fixed amount withheld from each paycheck
For Example: if your rental brings in $12,000 a year and expenses are $9,000, you'll have $3,000 in taxable income. At a 22% bracket, that's about $660 in tax. You can either:
1- Add $660/ number of pay periods to Step 4(c), or
2- Pay quarterly estimated tax.
I hope this additional information will help you make the right decision.
