Paying taxes on rental income

[Heather Hanoski]

End of last year I moved, and started renting our my old condo. I have been wanting to get into real estate investing for some time, but for other reasons I have not been able to. I thought this would be a good way to naturally make a move in that direction, but clearly did not do all my research. I was surprised to learn that all rent is considered "income" and I owe taxes on it. 

Is there a way to avoid this? The rent pays my mortgage for that property, it is not profit. I have built in about $175 roughly (after property taxes) that I save on the side for rental incidentals. The rent is very in line with the area, the only thing I can do is increase rent upon lease renewal, but I would like to do this all the right way. 

In the state of MN, is all rent considered income? Or I have read in other states it is not, or just the portion that is considered profit is taxed. Or is it prudent to take the rental amount your seeking and add 25% to account for taxes? That seems very unusual to do it that way, I would never rent it. As it is, I am not covering my mortgage and association dues after taxes. I must be missing something. 

I appreciate any help with providing insight! Thank you in advance!