I charge my tenants a flat fee so their payment stays the same month to month but I cannot deduct the utility bills effectively on schedule A because I'm still below the standard deduction threshold. If I have to report those funds received to pay my tenants utility bills as income it seems like in future years it would be advisable to lower their rent but make them pay the utilities directly so that I never receive the money therefore it would not be income? There is no official lease that says what rent is and that I pay the utility bill from the rent received, that's just what we did this past year because the renter was helping me out by keeping the house occupied after I moved out. I feel like I could deduct the utility bills off the top and not report it because they basically sent me money for rent as well as to pay their utility bills so that it didn't have to go into their name.
