What do I need to do differently this tax season?
Wife and I have W2 incomes and got a rental property this year. Is it recommended that we make quarterly tax payments on the rental income or is it better to adjust our W4s? Additionally is it better to use enhanced support offered by FreetaxUSA or to hire a CPA? Given the change in status, want to make sure we’re doing things right heading into 2025 Thank you
Answers
-
If the property was purchased with a mortgage, you likely don't have much net income after you deduct all expenses and depreciation - if this is the case, just adjust your W-4s to account so you don't have to bother with the quarterly payments. Regarding enhanced support vs. CPA, it depends on your comfort level. If it was multiple rentals, I'd say CPA, but with one you may DIY. You can also start with the enhanced service (as it's very affordable) and if you need to, use a CPA to consult for specific advice.
-
thank you very much! Appreciate your insight. Yes it was purchased with a mortgage. I will consider doing it myself with enhanced support.
-
Hi Sb6849,
FreeTaxUSA supports the entry of Rental Income on your personal income tax return. The process is fairly straightforward, and if you have questions as you go, you are welcome to contact Support.
If you wish to avoid paying estimated tax payments, you can adjust your w-4 with your employer.
-
thank you! Does support also assist with depreciation? Thank you
-
Hi,
The software walks you through depreciation. However, if you have questions as you are entering your information, Support can assist. If you need tax advice related to the depreciable asset, then you may consider upgrading to Pro Support.
