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Home Based Business Accounting Concern

    • 4 posts
    April 11, 2007 12:21 PM EDT
    I am trying to figure out how to pay for bills that are used by both
    personal and business purposes- i.e - phone, internet, electric, etc.-
    Any suggestions out there?
    • 4 posts
    April 11, 2007 3:47 PM EDT
    Thanks Bree- But do you pay them each month out of business or
    personal?
    • 14 posts
    April 11, 2007 12:49 PM EDT

    Hi Mark,

    You should be able to get your answers reading pub 583, Business Use of Your Home.  IRS has guidelines for you to follow.  Hope this helps.

     

    Click on link: http://www.irs.gov/publications/p583/ar02.html#d0e1506

    • 14 posts
    April 11, 2007 12:54 PM EDT

    In addition to that, you might want to read, Publication 587 (2006), Business Use of Your Home

    http://www.irs.gov/publications/p587/index.html

    Bree

    • 14 posts
    April 11, 2007 12:56 PM EDT

    If you want direct answers (pub 587)

    Business Percentage

    To find the business percentage, compare the size of the part of your home that you use for business to your whole house. Use the resulting percentage to figure the business part of the expenses for operating your entire home.

    You can use any reasonable method to determine the business percentage. The following are two commonly used methods for figuring the percentage.

    1. Divide the area (length multiplied by the width) used for business by the total area of your home.

    2. If the rooms in your home are all about the same size, you can divide the number of rooms used for business by the total number of rooms in your home.

    Example 1.

    • Your office is 240 square feet (12 feet × 20 feet).

    • Your home is 1,200 square feet.

    • Your office is 20% (240 ÷ 1,200) of the total area of your home.

    • Your business percentage is 20%.

    Example 2.

    • You use one room in your home for business.

    • Your home has 10 rooms, all about equal size.

    • Your office is 10% (1 ÷ 10) of the total area of your home.

    • Your business percentage is 10%.

    http://www.irs.gov/publications/p587/ar02.html#d0e897

    • 14 posts
    April 11, 2007 4:13 PM EDT

    It is a good rule to keep you personal separate from your business to avoid conflict.  Be sure to keep supporting docs for your business activity.   

    Bree 

    • 14 posts
    April 11, 2007 5:09 PM EDT

    Your so weclome Rich!  Love, love, love this site "Startup Nation"!  So sweet!  Im so new to the site and love the overall support and it intention for everyone who wishes to brave the world of business. 

    Respectfully,

    Bree

    • 335 posts
    April 11, 2007 5:05 PM EDT
    bree,

    awesome contribution. thanks for your support of CMark - that`s what this community is all about!!!

    rich

    ---
    Rich Sloan , Co-Founder, Chief Startupologist, StartupNation

    • 335 posts
    April 11, 2007 5:15 PM EDT
    Cool! plz spread the word. we want 10s of millions of people here, not just 100s of thousands!!!

    ---
    Rich Sloan , Co-Founder, Chief Startupologist, StartupNation