How much or really how can I deduct...

Discussion in 'Business Operations' started by tiedeman, Nov 27, 2004.

  1. tiedeman

    tiedeman LawnSite Fanatic
    from earth
    Posts: 8,745

    Ok, since my office is in my home I want to deduct a portion of my sewer and water bill off as a business expense.

    My questions though are how much can I really deduct, and also how can I figure out how much I can deduct? Like with my electric I deduct by the square feet of the house divided by the square feet of the room that I use, but how can you figure out the water/sewage?
     
  2. K.Carothers

    K.Carothers LawnSite Bronze Member
    Posts: 1,124

    It's based on percentages of use. Definately get a good CPA. I was told the actual dollar amount saved by declaring home use is minimal to the bottom line but raises your chance of an IRS audit. I choose not to declare my home office.
    Example:
    Total sq/ft home= 2500
    Business uses=150sq/ft
    % of business use=6%
    Take 6%of total utilities and that is what you can deduct to get your adjusted gross income down.
    If your gas bill is 1000/yr then you can use $60
    Remember its not $60 in your pocket, its $60 off your adjusted gross income

    Not worth it IMO
     
  3. K.Carothers

    K.Carothers LawnSite Bronze Member
    Posts: 1,124

    Sorry, I type faster then I read. That wasn't your question.
    I don't feel its worth the hassle. IMO
     
  4. lafrance4078

    lafrance4078 LawnSite Member
    Posts: 246

    Checking with the CPA this week, but I think that you can also deduct part of your morgage.
     
  5. tonygreek

    tonygreek LawnSite Gold Member
    Posts: 3,480

    if you deduct square footage, and intend to sell your home at some point, you'll have to exclude the deductions from your tax free (to 250k) gains when you sell. basically, be sure to consult an accountant.
     

Share This Page