FHA Property Tax advise

[Ephrem Bekere]

Hello,

Around end of August I bought a townhouse type property with an FHA loan (so I live in it too) and started renting out the rooms. (So I live in it too) While filing my tax returns, however, I ran into a few issues. I understand i need to report the income and figure out the expenses by using the square feet of the rooms. Both rooms rent for a total of $1100 and my mortgage is around $800. I just finished filling out my taxes and it said I owe about $700 for federal and state taxes. Is it supposed to be that high? This is after mortgage interest and depreciation and expenses were accounted for. Did I do something wrong.? Thanks in advance.