I am scheduled to close on my first property on 12/3/18.

I've always filed my own taxes myself but I've also always used the standard deduction (not itemized). Per my purchase agreement, seller is paying closing costs and most of the pre-paids which will include the first month's interest.

It sounds like I should go ahead and continue with the standard deduction again for 2018. I don't have any deductible expenses beyond those for my house purchase.

I think next year will be the first year that I see any tax benefits.

Advice is to pay someone to do your taxes. One of the best decisions I ever made and I waiting way too long to do it.

I plan to use one eventually. But it seems that this first year, I wouldn't benefit from itemizing. If I don't itemize, I think I'd spend more in CPA fees than I'd have a chance of getting back.

The one question I'm trying to reolve is whether or not I need to itemize this year.

I'm assuming that the seller (not me) will be allowed to deduct the closing costs/interest that he pays. If I can deduct them even though he's paying, then it MIGHT make sense to itemize.

Standard deduction vs. itemized has nothing whatsoever to do with how you figure taxes on your rental property. Those are figured separately and the result is either passive income (you made money) or a passive loss (you lost money). Then that gain or loss is added or removed from the adjusted income from your day job.

I don't find taxes to be particularly complicated to do, especially with today's consumer tax software.

Your rental property is all considered separate as far as income and deductions. The bottom line if you lose or make money is then added or subtracted on your form. There are special forms for it, it doesn't go where you use standard or itemized deductions. So you have almost a full month of service and it needs setting up the system for income, expenses and depreciation. You will probably still use the standard deduction for your own personal part.

I find turbo tax pretty easy to use. You need to get the one that includes rental property, (sometimes it is also the one that includes business). You can read the descriptions to find out which it is any given year. It will ask questions as to how much you paid, what your closing expenses were, how much is allocated to the cost of buildings that is depreciated, other various expenses and income from that property. It will then set up the forms, which you can look at to see what goes where. Then the next year, it imports all that basic information.

The person that pays gets the deduction. If you are living in half, then your half of costs will go on your personal deductions and you may not even have enough for itemization next year with the new tax laws. I rarely have enough for itemizing on our return even owning our own home.

The other half will be on your rental forms. If they are different sized units, you can allocate as percentage. Will you have to reimburse the seller for any property taxes, fuel in the tank (if you have one) Those again will be divided by percentage for cost deduction. Will he be prorating the rental income for December to give to you? That would be income. If you don't have a tenant and have to do repairs or upgrade, those need to be listed. If you don't have a tenant and it is ready to be rented "in Service" you can start deducting your costs to rent and depreciation on the rental unit. And don't forget your cost on insurance for the building or any extra liability insurance you pay for because you own a rental.

You asked a good question that many landlord don't know. Until you put your property in service as a rental, any upgrades will be added to the basis (cost of the property) and you can't deduct or depreciate them.

So when I purchased a run down home, I allowed the old tenants to stay for six months, paying market rents. Then when they moved, I put $60,000 into fixing up the place and depreciated those costs over 3 years, 5 years, 7 years, 15 years and 27.5 years -- depending what the items were.

The IRS tried to say you can't deduct that stuff because it was a new purchase. I had to show them the tax codes and a copy of my tenants lease and six rental payments (copy of each check with the cancelled post mark on the envelop). So I was able to write off the $60,000 and not add it to my cost......

You need to read up and/or get a good CPA that know about real estate tax codes. I had a friend sell a 3/4 million dollar property and his personal CPA said his tax liability would be only $50,000. I told him, based on the information give to me, it would closer to $250,000. He didn't listen, His wife didn't listen, his children would listen. I've been at the real estate gave for over 40 years and have several degrees in business, accounting, etc -- and I'm a licensed contractor. My friend just got a tax notice, he will owe an additional $200,000 in long term capital gains tax.