Guide for rental owners
Estimated taxes for landlords: when and how much
Rental income has no withholding, so you may need to pay as you go.
An employer withholds tax from a paycheck, but nobody withholds tax from your rent. If your rental makes a profit, you may need to pay some of that tax during the year, in quarterly estimated payments.
Do I need to pay?
Generally, yes if you expect to owe $1,000 or more when you file, after withholding and credits. Many owners whose rentals show a loss on paper (thanks to depreciation) don't.
The four due dates
| For income earned | Due |
|---|---|
| January to March | April 15 |
| April and May | June 15 |
| June to August | September 15 |
| September to December | January 15 of the next year |
When a date falls on a weekend or holiday, it moves to the next business day.
How much: the safe harbors
You generally avoid an underpayment penalty if your payments (plus withholding) cover the smaller of:
- 90% of this year's tax, or
- 100% of last year's tax (110% if last year's adjusted gross income was over $150,000).
The shortcut: withhold more at work
If you or your spouse has a paycheck, raising your W-2 withholding can cover your rental's tax instead. Withholding counts as if it were paid evenly through the year, even if you change it late.
Your state may have its own estimated payments and schedule; California's, for example, are front-loaded.
Example
Your rental is on track for $14,000 of taxable income at a 24% rate → about $3,360 for the year, or roughly $840 a quarter.
Tethered Properties does this for you
Tethered Properties shows your estimated tax to set aside so far this year, with the next payment's due date, so there are no surprises in April.
This guide is general information for rental owners, not tax advice. Tax rules change and every situation is different; your CPA or tax advisor knows your full picture. Figures are estimates.