Taxes - are the following income?

[Brad Wood]

For our live-in duplex we charge tenant's 1/2 of the monthly water bill. This varies each month. Is this amount considered taxable income and added on to their monthly rent? If it is, can it also be counted for as an expense?

With our outgoing tenant we deducted a small amount for repairs from the security deposit. Is this considered income as well? 

Thanks! 

-Brad.

[Bob Norton]

@Brad Wood Yes, any funds you receive from your tenants are considered income.  In the case of the water bill, you would count the 1/2 they reimburse you as income and the amount of the expense you paid attributed to your tenant as an expense.  So, essentially they will offset each other.  

In the case of the deposit, if you did not count the deposit as income when you received it from the tenants, then any amounts that you keep from their deposit is considered income when they move out.  You get a deduction for the repairs you made attributed to the tenant.  Again, this income and expense essentially offsets each other.

Hope this helps.