I own two rental properties & want to form an LLC. Is this enough homes to do this? They’re not worth but about 50k each. Is the IRS extremely picky when it comes to deducting part of your home to "manage" your business (in this case, an LLC)? I have a friend that works in sales, like me, and this friend does it every year (although, from a moral perspective, I think it’s wrong… they have a lot of personal belongings in their "office.") Any help is appreciated.

By what percentage will forming an LLC reduce my tax rate?

I know nothing about taxes, as my wife is an accountant (she thinks the idea of setting an area of our house as "office space" is a red flag to IRS).

I usually file with a local company but I want to do my Taxes myself online, I want to use Turbo Tax unless I hear other wise…OK what plan to pick they have 4, my husband was a self contractor 7months this year and I have a reg. w2.. we have 4kids and he has a ton of work stuff to clame, what should I do to get the best return?? thank you

they have these to pick from:

1.If you don’t need much guidance for your simple return, choose TurboTax
Free Edition.

2. To maximize your deductions, choose TurboTax Deluxe.

3. if you own stocks, bonds, mutual funds, or rental properties, choose TurboTax Premier.

4.If you are a sole proprietor, consultant, contractor, or single-owner LLC, choose TurboTax Home & Business.

— Broaden the 1.45-percent Medicare tax on earned income to “passive income,” which could include money from capital gains, rental properties and businesses that do not require direct participation. This could raise 0 billion.

— Levy a five-percent surtax on individuals who earn more than 0,000 and couples that make million.

— Tax health benefits at a higher level than had been considered. Two scenarios are in play. Taxing plans worth more than ,300 for a family and ,300 for an individual could raise 0 billion. Increasing the cut-off to plans worth more than ,000 would bring billion.

— Capping the tax break on itemized deductions at 28 percent, as President Barack Obama had proposed, or freezing the top deduction rate at 35 percent when the Bush tax cuts expire in 2010. The first scenario would raise 8 billion, while the second would collect billion.

— Issue tax credit bonds to pay for the proposed Medicaid expansion, raising billion.

— Charge fees to pharmaceutical manufacturers, bringing in as much as billion, and insurance providers, raising billion.

– Raise taxes on sodas and sugary drinks. A 3-cent hike could pick up billion, and a 10-cent hike could make 0 billion. This one already appears out of favor: Many senators have specifically ruled out the sugar tax, and a Senate Democratic source said it was the one option that was clearly not gaining traction with committee members.

http://www.politico.com/news/stories/0709/24752.html

— Broaden the 1.45-percent Medicare tax on earned income to “passive income,” which could include money from capital gains, rental properties and businesses that do not require direct participation. This could raise 0 billion.

— Levy a five-percent surtax on individuals who earn more than 0,000 and couples that make million.

— Tax health benefits at a higher level than had been considered. Two scenarios are in play. Taxing plans worth more than ,300 for a family and ,300 for an individual could raise 0 billion. Increasing the cut-off to plans worth more than ,000 would bring billion.

— Capping the tax break on itemized deductions at 28 percent, as President Barack Obama had proposed, or freezing the top deduction rate at 35 percent when the Bush tax cuts expire in 2010. The first scenario would raise 8 billion, while the second would collect billion.

— Issue tax credit bonds to pay for the proposed Medicaid expansion, raising billion.

— Charge fees to pharmaceutical manufacturers, bringing in as much as billion, and insurance providers, raising billion.

– Raise taxes on sodas and sugary drinks. A 3-cent hike could pick up billion, and a 10-cent hike could make 0 billion. This one already appears out of favor: Many senators have specifically ruled out the sugar tax, and a Senate Democratic source said it was the one option that was clearly not gaining traction with committee members.

http://www.politico.com/news/stories/0709/24752.html

I have two rental properties in California. Previously I lived
in one of them, and rented out the other. Earlier this year,
I moved to Texas and rented both of the Calif houses out.
The only mortgage is on the Calif property, I have none in Tx.

Now one of my renter’s is moving. My question is: If I have to travel back to Calif to clean, run an add, sign off with a new renter or whatever, what -if any- of this can be used as a business expense on my taxes? And would the rent be considered California income, or is it all business income?

I appreciate the serious answers.