How to best handle boarder income?

[Christopher Nerio]

Hi, I rented the rooms out in my basement this past year and collected $16,200 in income. How can I best handle this income, come tax time? It's obviously a good chunk of money that will be added to my income but have read that I can deduct certain expenses in order to reduce the income. Does claiming the income have any benefit other than it obviously being legal? Can I establish an LLC at this point even if it is my primary residence and I am the owner? Can my new wife, who isn't on the title yet, claim the income separately? How much is boarder income taxed and how is it treated? What happens when the income - expenses equals in the negative? Also, I have been reading on BP that lenders do not count boarder income in order to qualify me for a loan. Am I safe to assume that in the next year, which is when I would like to buy an investment property, it will not be used as additional income in order to reduce my DTI and qualify for a better loan? Thanks.