I am aware this is a stupid question but I can't figure it out.

I am buying a house and intend to have roommates while I go to grad school. The house I'm buying will be a payment of about $1440 a month. My roommates will pay $500 and $600 per bedroom, so $1100 total. I know that I need to report this as income, but I keep getting different answers as to what I can deduct/what I will be liable for tax wise. The house was assessed for $1800/month rental value, is up to code, current license, all that stuff.

I am planning to put aside $300 extra per month just in case the worst case scenario happens and I owe the IRS 22% of every penny I make in rental income (my income is about 50k a year). But I'm wondering if this would actually be accurate, since the cost of the mortgage payment is more than what I'm getting in rent, so I won't really make money beyond what goes to my mortgage. Would this be considered 'below market value' and therefore considered sharing expenses and not taxed as income? Or would I itemize my deductions, list the 2/3 the cost of the mortgage interest as expenses, and hope that that all reduces my income enough to lower my tax burden?

I guess I am just confused as to what I would actually pay in taxes. Like I said, I plan to save an extra $300 a month just in case (and have more than that set aside, and I have a job that allows for picking up shifts whenever I need so I can manage the payments otherwise – I know I am pushing the 30% rule but with even a small amount of rental income I will be fine- it is in a university neighborhood so I can easily find roommates – i have had roommates in the same area for 3 years, usually get 20 responses in 1 day of posting). I'm lazy when it comes to taxes – I just let the government have my money and then I beg for it back. I can't really do that in this situation so I'm just wondering if anyone can help me out.

Other info:

MN
Income ~50k
Single
26
FHA mortgage (roommates OK, would have to refinance for full rental property)

submitted by /u/imjustheretointernet
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