1) When I calculate entire home footage for splitting the rental property expenses (e.g. to split the mortgage interest, etc), do I count in the basement and the garage? what about the backyard (no building, just an open space)?
The yard is not enclosed living space. Period. When being asked for square footage, it's asking for square footage of the "ENTIRE" building/structure, and then the square footage that is "exclusive to the renter". On that the program will figure the percentage of floor space that is exclusive to the renter and tthat's how things will be allocated.
2) Does the rental property allocation have to be the same for calculating rental expenses and assets/depreciation?
A definitive YES for figuring the depreciation percentage and what percentage of your mortgage interest, property taxes and insurance is claimed on SCH E. But rental expenses (utilities and the such) can be based on the same percentage, or based percentage-wise on the number of people that occupy the entire structure provided all occupants of the structure have access to the utilities being allocated to SCH E. The one and only thing that you can not allocate to the SCH E *at all* is the land line telephone bill.
My tenants took a basement room for storage in 2019. I have adjusted the rental property expenses. Do I need to update the previously set allocation for assets/depreciation as well?
You don't "update" anything. If you converted more space from personal use to rental use, then you enter it as a new physically separate asset allocated to rental use. Or you can enter it as a physically separate unit on SCH E. Either way works.
3) Under home office, Turbotax asks for Entire Home Footage. Do I enter the entire property? or take out the rental portion?
A home office is not allowed for your W-2 job.
A home office is not allowed for SCH E income unless you are a real estate professional. So this question is moot. (Renting out part of your home or a unit in a duplex you own does not qualify you as an RE professional)
However, if you have a separate SCH C business that you're claiming a home office for, you don't "take out" anything.
