How much to put away for taxes

Question

Linda Weygant · Answer

Ask your CPA to set next year's estimated taxes up in their software to automatically withdraw from your account on the proper due dates.  When they E-File for you, this request is submitted as well.

Easy peasy, lemon squeezy.

I then set up automated emails in my system to automatically remind those folks 2 weeks before the deadline that they will have an auto withdraw coming up.  They can cancel/change the amount if needed if they call the IRS 48 hours ahead of the withdrawal.

Basit Siddiqi · Answer

@Paul RumoloIt looks like you already got some solid advice.First you need to determine if your rental activities will increase your taxable income.If they will increase your taxable income - you may be required to make additional estimated taxes to the IRS/States.You can do so by making quarterly estimated payments or ask other sources that already withhold on your behalf to withhold more.For example - if you work for an employer and they withhold $500 for ever $2000 that you make; you can ask them to withhold $600 instead of $500.

Obviously - It may be hard to calculate by yourself - you may want to reach out to an accountant for a more precise answer based on your specific scenario.

Sam Shueh · Answer

My CPA who provides 4 vouchers for Fed and same for State. Our chore is pay it on time.

Paul Allen · Answer

We use a progressive system with multiple tax brackets, so the amount of your monthly net income determines the amount you should expect to pay in taxes.

https://www.nerdwallet.com/blog/taxes/federal-inco...

(Assuming you also pay taxes in California...)California also uses a progressive system:

https://www.tax-brackets.org/californiataxtable

Are you sure you will have taxable net income? It is not uncommon for rental properties to cash flow neutral or even a bit negative at first. Especially after depreciation expense is considered. It might be worth your while to sit down with a tax pro and come up with a solid projection for taxable income.

Best of Luck with Your Real Estate Investing!

How much to put away for taxes

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