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Reasonable tax to income ratio

I would appreciate your input, I think this also might be interesting to other people. I live in IL and make just over $100,000 on W-2. I also own a rental property with all kinds of losses and unforseen expenses last year (please know what you get into before you buy anything in marginal areas in Chicago). Can anybody tell what the reasonable tax to income ratio is since I want to deduct as much as possible, but at the same time I don't want my taxes to appear too low based on IRS computerized criteria and get audited and deal with that. I have few other expenses besides this rental property. Thanks a bunch......

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Reply to
andychicago1
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There is no such number. If the rental property generated enough loss between 'regular' i.e. interest, tax, etc., and the expenses, you need to take them. If the losses are so great you would pay no tax, well, AMT will help you get back in. Keep in mind, there is a distinction between repairs, sheetrock, painting, etc., and new items, such as appliances. Tenant ruins your dishwasher and fridge and you don't expense it, you depreciate it. Keep good records. Not taking a deduction that's real for fear of an audit tells me that you feel you don't have the records to back them up. JOE JoeTaxpayer.com

Moderator: The time an auditor will spend disrupting your life is a function of your honesty supported by quality recordkeeping.

Reply to
joetaxpayer

The IRS computer uses discriminant function statistical analysis, so the complex formula unlikely makes a simplistic computation like ratio of tax liability to total income. Fred F.

Reply to
TxSrv

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