Can I deduct the depreciation and expenses from the income to reduce my taxable income?
No. Rental income is passive. It's not earned like your W-2 income is. Passive expenses can only be deducted from passive income, and that's it. Once your rental expenses gets your taxable rental income to zero (and it will) that's it. Any remaining expenses are just carried over to the next year.
Basically, in the very first year you enter the rental property into the TTX program you will see at an absolute minimum, the property itself listed in the Assets/Depreciation section. If not, then click the Add and Asset button and work it through to add the property itself. From that point on (if you enter everything correctly) the program will take care of the depreciation *for you* automatically, in the background with each passing year. That is of course, provided you import the data from the prior year tax file.
