EvrClrx311
Full time employment: Posting here.
- Joined
- Feb 8, 2012
- Messages
- 648
My Google searching has failed me on this one, so has the CPA from TurboTax Live. I don't think my situation is very unusual though, and I'm sure this is something people here may have dealt with who have had real estate investment (rental properties) so I thought I'd ask, even if most here aren't dealing with W4... you may have in the past. Thanks in advance!
I was just married in late 2019, and my wife and I combined our finances and bought a new home. We both kept our other houses. So we now have three properties, and are renting out two (one is already rented, the other will start next month). The annual mortgage interest we pay on the two rentals will be in the neighborhood of ($15,600) and ($7,500) property taxes on each will be ($3,000) and ($1,000). Also for tax purposes the depreciation on them is ($13,454) and ($6,363). So we will obviously be itemizing deductions.
It's my understanding that the mortgage interest and prop taxes basically reduces the amount of income we report from the rental payments we receive.
I'm currently filling out (updating) my W4 to account for married life, and the fact that we will have a rather large itemized deduction amount moving forward (to include these rentals). However, should I be using the mortgage interest and property taxes values on the W4 worksheet to compute my withholding figure? Or should I not include those? On one hand it seems that since that tax benefit is simply reducing the income reporting of the rental income, that it shouldn't impact my job's withholding on my W4... but on the other, the W4 is asking for me to include "other" deductions I plan to take. So I'm lost on whether to include it or not?
I was just married in late 2019, and my wife and I combined our finances and bought a new home. We both kept our other houses. So we now have three properties, and are renting out two (one is already rented, the other will start next month). The annual mortgage interest we pay on the two rentals will be in the neighborhood of ($15,600) and ($7,500) property taxes on each will be ($3,000) and ($1,000). Also for tax purposes the depreciation on them is ($13,454) and ($6,363). So we will obviously be itemizing deductions.
It's my understanding that the mortgage interest and prop taxes basically reduces the amount of income we report from the rental payments we receive.
I'm currently filling out (updating) my W4 to account for married life, and the fact that we will have a rather large itemized deduction amount moving forward (to include these rentals). However, should I be using the mortgage interest and property taxes values on the W4 worksheet to compute my withholding figure? Or should I not include those? On one hand it seems that since that tax benefit is simply reducing the income reporting of the rental income, that it shouldn't impact my job's withholding on my W4... but on the other, the W4 is asking for me to include "other" deductions I plan to take. So I'm lost on whether to include it or not?