From the Wyo Stays team. Educational information, not tax advice. Amounts and deadlines are specific to you — confirm with your CPA.
If your rental makes money and taxes aren't being withheld, the IRS generally expects you to pay as you go — in quarterly estimated payments. Skip them and you can owe penalties on top of the bill. Here's the plain-English version.
Who this applies to
Owners whose rental (and other non-withheld income) will create a tax bill above a threshold generally need to make quarterly estimates. If the STR is your main income or a big side income, this is probably you. Your CPA confirms.
The rhythm
Estimated payments are due roughly four times a year (typically mid-April, mid-June, mid-September, and mid-January of the next year — confirm current dates). You're pre-paying your expected tax in installments.
How much to set aside (the safe habit)
- A simple discipline: set aside a percentage of each month's net rental income in a separate "tax" savings account. Your CPA can give you the right percentage for your bracket and situation.
- Base estimates on your projected annual net — and remember STR depreciation (see the Tax Advantage Guide) can significantly reduce what you owe, sometimes to little or nothing in early years. That's exactly why you coordinate with your CPA rather than guessing.
Avoiding the penalty
The IRS generally won't penalize you if you've paid enough through the year (there are "safe harbor" rules based on prior-year tax). Your CPA sets your target so you neither underpay (penalty) nor wildly overpay (an interest-free loan to the government).
The takeaway
Don't let a profitable year become an April shock. Set aside a slice of each month's income, know your quarterly dates, and let your CPA set the number. Boring, but it keeps you calm and penalty-free.
→ Read the Tax Advantage Guide to see how depreciation can shrink the bill, or → get a free evaluation.
Educational information only — not tax advice.