I am brand new to having a rental, and so I am looking for some basic help with the income/expenses/taxes associated with it.
The situation is a bit peculiar, perhaps. I bought the main house and lot 7.5 years ago. I took my time (and spent lots of $$) renovating the accessory dwelling unit (ADU). In August of 2012, I moved out of the main house and into the ADU. I started renting out the main house in the middle of August 2012, and have rented it ever since (to the same tenant).
Since my rental income in 2012 was not much, I didn't make the effort to do fancy stuff on my taxes for that year. I just reported the rental income and paid tax on it.
However, this year, the extra income is significant enough to make me wonder if I should treat this situation more formally (deduct depreciation, etc.) at tax time. I have also had some maintainance issues and would like to deduct a portion of those expenses.
A little more information: both the main house and the ADU are on the same lot. The water/garbage/sewer, electric, and natural gas bills are for both houses (combined).
I recently had the whole place appraised (when I did a refi) a few months ago, but the appraisal value is for the lot and both houses combined.
So, I guess I am wondering how to proceed. I am considering seeing a tax professional, perhaps just this year, in order to get set up regarding taxes with this rental. Perhaps, after this year, I can then do the taxes myself.
All suggestions/input is welcome! Thanks in advance.