Quarterly Tax Returns

If I become a landlord and start collecting rental income, does this count as self-employment income and must I therefore file quarterly tax returns? I am in Michigan.

Comments(4)

  • DaveT20th October, 2003

    Your rental real estate activity is a passive activity. Rental income is not self-employment income.

  • InActive_Account29th October, 2003

    As far as the IRS is concerned, you don't file quarterly unless you have payroll taxes. You are required to make a quarterly deposit to your account if your tax liability at year's end will exceed $1,000. If your rental income combined with your other income will result in more than $1,000 owed, you need to make quarterly payments. The math can be tricky so consult with a good tax advisor for help in calculating your payments and if you can qualify for an exemption in the first year.

  • DaveT2nd November, 2003

    Quote:As far as the IRS is concerned, you don't file quarterly unless you have payroll taxesthowell,

    Please clarify this statement for me.

    Doesn't the individual whose sole income is derived from a substantial stock portfolio, and who receives tens of thousands dollars each year in dividends, interest, and capital gains disbributions also file a quarterly estimated tax returm?

    If your answer is yes, then the real estate investor whose only source of income is passive income from his free and clear rental properties might also have to file a quarterly estimated tax return because his net income is large enough to incur a tax liability -- even though no self-employment taxes apply.

    Do you agree?
    [ Edited by DaveT on Date 11/02/2003 ]

  • InActive_Account3rd November, 2003

    You are required to make a quarterly deposit to the IRS when you make thoses sums of money but you do not tell them how much you made or report your deductions. You only send in a payment deposit coupon known as a 1040-ES to deposit the money on your account until you file a return at year's end.

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