Tax advice needed about renting out my house?

I'm in a high end tax bracket and I've rented out my house. I've rented it for $1400.00 a month. This rent becomes taxable income. My question - how can avoid paying a high rate of income tax on this rental income? Could I set up a small rental buisness and deduct my mortgage payment as an expense? What other options do I have to avoid the incometax hit of renting out my house?Tax advice needed about renting out my house?
You don't have to have a business registered to have the mortgage payment deducted.





You can automatically deduct a certain portion of your mortgage payment and any other expenses you have on that property to offset the rental income you are receiving. Expenses such as house insurance, property taxes, any renovations any utilities that you might pay etc. etc.





I have rented out my condo for years in Ontario, Canada and my tax preparer is almost always able to cut my rental income down to nearly zero against my expenses.





Find a good tax preparer and for goodness sakes not H%26amp;R Block or any of those places. An accountant is best.Tax advice needed about renting out my house?
You can't change your marginal tax rate, but you can reduce your taxable income via deductions. You can deduct interest (but not the whole mortgage payment) %26amp; property taxes just like when you lived there. In addition, you can deduct any other expenses such as advertising, repairs %26amp; maintenance, and professional expenses (legal/accounting/bank fees) that are related to you renting the property. In addition, you can take a deduction for depreciation.





These probably won't offset the entire amount of rental income, but they should offset a good chunk of it.








PS Don't listen to mrscmmckim. Almost everything in her post can be classified as wrong, stupid, or nonsense.
Actually, you should have a business registered for the rental and all expenses should be deducted. Mortgage, insurance, repairs, loss from non-payment of rent or months of the house being empty. An accountant would cost an arm and a leg and eat up your profits on this venture. I suggest you do some research on the internet, get a book or talk to another landlord for ideas.





I have many many years experience at this process....take my word for it, it is a low paying venture unless the house is paid for already or you have multi buildings.
Go to the IRS site and request Publication 17. Its a little known thick book covering all tax issues.





http://www.irs.gov/formspubs/index.html?鈥?/a>
You are allowed to deduct the expenses you incurred related to your rental. It is detailed on a Schedule E of form 1040 and includes things like advertising, repairs, cleaning and maintenance, depreciation, etc. Of course, since you are still the owner you can deduct the mortgage interest and homeonwner's insurance premium. If you pay a management company fee that is deductible. Homeowner's associtation dues, travel expenses you incurred going back and forth to show, maintain and check on the property. All are deductible.
hire an accountant you cheap canuck