Just Curious About Calculating Utility Costs!

Business By Meagazz Updated 28 Feb 2009 , 11:42pm by Meagazz

Meagazz Posted 27 Feb 2009 , 3:11pm
post #1 of 5

Hi everyone,

I have been thinking a lot lately about wanting to start my own business and I have been reading a lot of different posts from people - I should also add that they are very helpful!

I do know for a fact that being I live in Alberta, Canada, I am unable to have my home kitchen licensed... But I am still curious about something anyways...

For all of you home based business people, how do you add (or calculate) the cost of your utilities to ensure that you are therefore charging enough for your cakes to pay the extra on your bills? Because my understanding is that your utility bills would still all be combined...

Thank you for satisfying my curiosity!

Meagazz

4 replies
cupcakemkr Posted 27 Feb 2009 , 3:17pm
post #2 of 5

not sure, but I do know that since I've started baking my electric bills have gone up $20 per month. Taking that into consideration, if I bake 2x per week it would be costing me about $2.50 a day.

indydebi Posted 28 Feb 2009 , 5:04am
post #3 of 5

As mentioned above, once you have a track record, you'll be able to calculate the difference.

In the U.S., you can deduct a portion of your utilities based on the square footage of your home business. (But there's also some rule about it being "exclusive" square footage. Don't ask me to explain.)

But simplistically ... if I have a 2000 square foot house, and I use my 200 square foot front room as my exclusive office space, it's 10% of my total household square footage. So I can deduct 10% of my utilities as office expense.

Being in Canada, I of couse have no idea how your tax laws work, but I offer this info as an idea to use as a guideline for your expenses.

-Tubbs Posted 28 Feb 2009 , 10:27pm
post #4 of 5
Quote:
Originally Posted by indydebi

In the U.S., you can deduct a portion of your utilities based on the square footage of your home business. (But there's also some rule about it being "exclusive" square footage. Don't ask me to explain.)

But simplistically ... if I have a 2000 square foot house, and I use my 200 square foot front room as my exclusive office space, it's 10% of my total household square footage. So I can deduct 10% of my utilities as office expense.

Being in Canada, I of couse have no idea how your tax laws work, but I offer this info as an idea to use as a guideline for your expenses.



The rules are similar. You can write off utilities, property tax etc for the percentage of your home you use exclusively for your business, to a maximum of ???% (can't remember right now). And it does need to be exclusive - my neighbour, who runs her interior design business from her den was advised to remove the sofabed from there, so it was ONLY an office and could not also be used as a bedroom.

BTW - you can have a legal, inspected home-based cake business in AB, as long as it's in a separate commercial kitchen. Mine will be in my basement.

Meagazz Posted 28 Feb 2009 , 11:42pm
post #5 of 5

TubbsCookies - I noticed that you live in Calgary! Me too! And yeah, I've been trying to look into the separate kitchen thing for a home based business, but unfortunately this would have to be in the future as I do not own my own home yet (hopefully in the next year or 2 when the market drops a bit more)!
It is nice to know that one day I could possibly end up being my own boss!
And I will definitely have to look more into the home office tax write offs as well!

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