Filing my schedule E for the first time, need help

[Asher Anthes]

Hey guys, just bought my first home in May of last year. Have got it rented out and living in it with positive cash flow. I'm looking to buy another house ASAP.

My question is how to minimize my taxable income this year while still creating a large enough debt to income ratio to allow another mortgage. I divide my rental income into rent ($1350 a month) and utilities split between me and my tennants (usually about $450 a month). Should I claim this utilities income and then can I write off utilites as a business expense?

Also, do I depreciate the house value based on the appraisal or the purchase price? And will the next bank (where I'm trying to get a loan for a second house) look at depreciation as deduction of my income? Because depreciation technically doesn't lower my cash flow at all.

Thanks guys, I'm a noobie asking probably dumb questions, but I have a lot to learn! And I want to make sure I do it right the first time!