Advice On Quarterly Tax Payments

1. Pay 110% of Prior Year Taxes

Safe Harbor Rule for High Earners: Since your AGI exceeds $150,000, you're correct that to avoid penalties, you need to pay at least 110% of the prior year’s total tax liability (from Line 24 of your Form 1040).
Quarterly Payments: Divide the 110% figure by four and make equal payments each quarter unless your income fluctuates significantly.

2. Combining Withholdings and Quarterly Payments

Check Withholding First: Review your wife's W-2 withholdings (including any tax automatically withheld from her stock bonuses) for the year.
Subtract From Quarterly Estimate: Subtract her cumulative withholdings each quarter from your quarterly tax liability. If her withholdings cover enough of the quarterly amount, you can reduce or skip your estimated payment for that quarter.

3. Inconsistent Income (Your Self-Employment & Rentals)

Since your income is highly variable due to short-term rental income and depreciation, relying solely on quarterly payments might lead to overpayment or underpayment. You can use IRS Form 2210 to calculate if you qualify for penalty relief by using the annualized income installment method, which aligns payments with actual income earned per quarter.

4. Using a Credit Card for Quarterly Payments

Yes, you can pay estimated taxes using a credit card. The IRS allows this via third-party payment processors:

Visit the IRS Payments Page.
Choose one of the approved processors like PayUSAtax, Pay1040, or ACI Payments.
Note: These processors charge a fee (typically 1.85%-1.98% of the payment).

5. Submitting Quarterly Payments

Online (Preferred): Use the IRS Direct Pay system or create an account on the Electronic Federal Tax Payment System (EFTPS).
By Mail: If you prefer, you can mail your payment with Form 1040-ES to the IRS, but online payments are faster and more secure.

6. Maximizing Credit Card Payments

If using a credit card, consider:

Earning rewards points, cash back, or other benefits that offset the processing fee.
Paying early enough to avoid delays in processing.

Final Considerations

Track Adjustments: Reassess your wife’s W-4 regularly to avoid under- or over-withholding based on unexpected bonuses.
Depreciation & Deductions: Ensure you’re maximizing your deductions for the short-term rentals, including depreciation, which can significantly lower your taxable income.
State Taxes: Don’t forget state estimated tax payments if applicable.