Things like towels, blankets, etc wouldn’t be depreciated, they’d be expensed directly. Things like a kitchen remodel will be expensed over 40 years, as the portion of the remodel attributed to business use is an improvement to a business property. There are strict schedules for depreciation, depending on what the item is, and depending on the percentage of business use. There’s also rules as to when the items went into service. Depreciation is also not optional, if you stop doing the business later, or sell the property, you have to recapture the depreciation, whether you took it or not. If you rent instead of own you will not be able to depreciate the property or improvements, but you would the equipment purchased. Depreciation is a very complicated area. I have taught income tax preparation to beginners as well as experienced professionals and its a topic that confuses even the professional.
The profit or the loss is what is transferred to the 1040, so it does add to or take away from your other income to determine your taxable income. In the first year you’re not going to get penalized for not making quarterly estimated payments, as there was no reference point on which to estimate. Each year will determine the base for the next year’s estimated payments. The rule is 100% of the tax paid the previous year or 90% of what you will owe this year. It may be until you really get going that your withholding from your job will cover any estimated taxes that you need to make.
There’s so many ways that taxes can be done wrong. I’ve straightened out the mess that other preparers have made so many times that I cant count. I also expect that the IRS will determine to watch shared economy returns closely. So far I haven’t seen an official statement about it but that could come about any time. Make sure that your preparer knows Schedule C backwards and forward and is up to date on current regulations regarding what’s going on with shared economy in the eyes of the IRS and your state. Also be aware that your Board of Equalization (sales tax) may expect that you have a sellers permit. Here in California, they do for hotels, of which Air would be categorized, because we perform services such as maid service, food, etc., therefore its considered a hotel and needs a seller’s permit. You may not have an actual taxable amount due, but you may need a permit and file timely returns.