Renters paying $500 per month .... How to Deosit it Taxes on it?

[Michael Dunn]

Good Evening ,

I'm in a situation that is a good one , although it is new territory for me , and I need some wisdom as to how best to go about it.

The situation is .....  I just bought a House that has a separate " Mother in Law " wing that is attached to the main house ( by the Roof Line only ).

The same renter has been living in and renting this Mother in Law unit for almost 2 years now , at $500 per month.  The Original owner , just deposited the $500 into their Bank, and I guess claimed it as Income.

My questions then are...

1. With me as the New owner of he property and having a current renter paying $500 per month , do I just need to deposit this money in my account as well, and claim the $500 on my taxes as " Income " or how does Rental income work ( get classified ) via when it comes to taxes ?

I definitely want to show and have a paper trail of this $500 rental income each month , so what's my best option ?

2. At what Tax Rate is rental Income taxed at ?  15% across the board ? 20% ?

3. How does Depreciation of the Property come into play each year, as far as writing off the Depreciation come Tax time ? 

Thank you for the help. Like I said, I am in new waters here, and want to make sure that I cover all bases , and do things the right way , as to avoid any hiccups come Tax time