Daycare.com Forum
Daycare and Taxes>Utilities Deductions-Heat & Water
biglou 07:25 PM 10-29-2012
Hi all
I read in Tom Copeland's Family Childcare and Record Keeping guide, ch.4 on shared expenses and two ways to calculate, Time space vs. actual business use.
The facts: I have a two family house with my DC exclusively using one apartment. The second apartment is used my the family. The sq. footage is the same in each apartment.
Which method is better to use regarding the expenses of heat &water, which is billed to the entire house? Any formula I can use based on details below.
Regarding heat, i see it as equal or 50/50 unless the IRS factors in the weekends when there are no kids, but then again, I cannot simply turn off the heat going to that apartment after the kids leave and the space is 100% exclusive to the business.
Regarding water, this is more difficult to measure. I know the business uses the majority of it since only my wife and I live in the second unit. The house has a water meter, but not each apartment.
Thanks,
Big lou
I read in Tom Copeland's Family Childcare and Record Keeping guide, ch.4 on shared expenses and two ways to calculate, Time space vs. actual business use.
The facts: I have a two family house with my DC exclusively using one apartment. The second apartment is used my the family. The sq. footage is the same in each apartment.
Which method is better to use regarding the expenses of heat &water, which is billed to the entire house? Any formula I can use based on details below.
Regarding heat, i see it as equal or 50/50 unless the IRS factors in the weekends when there are no kids, but then again, I cannot simply turn off the heat going to that apartment after the kids leave and the space is 100% exclusive to the business.
Regarding water, this is more difficult to measure. I know the business uses the majority of it since only my wife and I live in the second unit. The house has a water meter, but not each apartment.
Thanks,
Big lou
TomCopeland 07:56 PM 10-31-2012
Originally Posted by biglou:
Hi all
I read in Tom Copeland's Family Childcare and Record Keeping guide, ch.4 on shared expenses and two ways to calculate, Time space vs. actual business use.
The facts: I have a two family house with my DC exclusively using one apartment. The second apartment is used my the family. The sq. footage is the same in each apartment.
Which method is better to use regarding the expenses of heat &water, which is billed to the entire house? Any formula I can use based on details below.
Regarding heat, i see it as equal or 50/50 unless the IRS factors in the weekends when there are no kids, but then again, I cannot simply turn off the heat going to that apartment after the kids leave and the space is 100% exclusive to the business.
Regarding water, this is more difficult to measure. I know the business uses the majority of it since only my wife and I live in the second unit. The house has a water meter, but not each apartment.
Thanks,
Big lou
If you use one apartment 100% for your business and one apartment 100% personal, then it's simple to claim 50% of the total house expenses as business. If you can separate out some of the house expenses, to get a more accurate cost of the 100% apartment, then do so.Hi all
I read in Tom Copeland's Family Childcare and Record Keeping guide, ch.4 on shared expenses and two ways to calculate, Time space vs. actual business use.
The facts: I have a two family house with my DC exclusively using one apartment. The second apartment is used my the family. The sq. footage is the same in each apartment.
Which method is better to use regarding the expenses of heat &water, which is billed to the entire house? Any formula I can use based on details below.
Regarding heat, i see it as equal or 50/50 unless the IRS factors in the weekends when there are no kids, but then again, I cannot simply turn off the heat going to that apartment after the kids leave and the space is 100% exclusive to the business.
Regarding water, this is more difficult to measure. I know the business uses the majority of it since only my wife and I live in the second unit. The house has a water meter, but not each apartment.
Thanks,
Big lou
If you are using part of the personal apartment for business purposes (office, storage, etc.) then you have greater than 50% use of your entire home for business. If this is the case, follow the directions in my article:http://www.tomcopelandblog.com/2011/...-use-rule.html
biglou 12:04 PM 11-01-2012
Thanks for the reply with info. My gas/electric are billed separately to each apartment, so that's an easy one. I guess the 50/50 rule on heating and water will be used because I can't separate these.
Another quick question. I have a portion of my yard fenced off and dedicated to the daycare as well. Does this qualify for the T/S rule as well? I have no sq ftg. measurement! Which means I may need to do it. I would guess it represents about 35% of my total yard space.
Another quick question. I have a portion of my yard fenced off and dedicated to the daycare as well. Does this qualify for the T/S rule as well? I have no sq ftg. measurement! Which means I may need to do it. I would guess it represents about 35% of my total yard space.
TomCopeland 06:12 PM 11-01-2012
Originally Posted by biglou:
Thanks for the reply with info. My gas/electric are billed separately to each apartment, so that's an easy one. I guess the 50/50 rule on heating and water will be used because I can't separate these.
Another quick question. I have a portion of my yard fenced off and dedicated to the daycare as well. Does this qualify for the T/S rule as well? I have no sq ftg. measurement! Which means I may need to do it. I would guess it represents about 35% of my total yard space.
Don't count outdoor space as part of your time-space % calculation. You could count a deck because it's attached to the home.Thanks for the reply with info. My gas/electric are billed separately to each apartment, so that's an easy one. I guess the 50/50 rule on heating and water will be used because I can't separate these.
Another quick question. I have a portion of my yard fenced off and dedicated to the daycare as well. Does this qualify for the T/S rule as well? I have no sq ftg. measurement! Which means I may need to do it. I would guess it represents about 35% of my total yard space.
biglou 06:18 PM 11-01-2012
Thanks again. You are an excellent resource for the forum. I purchased several of your books, and I am reviewing your site. I just visited the FCF site and I am reviewing the helpful info there. Of course, I found there link posted on your blog 3/27/12 starting new business.
Thanks again.
Big lou
Thanks again.
Big lou