For Those With Home Based Businesses

Business By love2makecakes Updated 7 May 2009 , 5:13pm by vrmcc1

love2makecakes Posted 6 May 2009 , 3:23pm
post #1 of 7

I am just wondering for those who have their bakeries out of the home, how do you figure the costs of electricity, water, gas, etc. for your business? I have the rent part figured out cause i can take the sq ft of my house divided by the sq ft of my seperate kitchen and figure out that portion. Maybe you can't even claim that stuff when you are out of your home, I did not claim any of it on my taxes last year?

6 replies
Ruth0209 Posted 6 May 2009 , 3:32pm
post #2 of 7

I'm pretty sure you can claim a percentage. I read somewhere recently that the IRS has some percentage they allow based on the size of the bakery space and the volume of sales or something like that.

IRS publication 535 may help.

courtney1009 Posted 7 May 2009 , 1:27pm
post #3 of 7

I wish I could help, but I don't claim it. I think it's just too complicated. Maybe one day if my business is huge I'll hire an accountant and get a little more nit picky with deductions, but for now it's just too much hassle.

all4cake Posted 7 May 2009 , 1:38pm
post #4 of 7

when filing my taxes, there's a series of questions pertaining to utilities. I don't know what the percentage is...but it seems to me it's like if your area for business use was 1/8 of the overall sf of the house, amount would be 1/8 the total utilities....I do mine with a program that automatically figures it once I put the sf and the total utilities in their appropriate areas of the form.

vrmcc1 Posted 7 May 2009 , 1:48pm
post #5 of 7

According to my tax accountant, there is a formula you has to do with the size of your kitchen. But she said that if you dont have a separate kitchen it has some to do with the amount of time it is use for business use. And that claiming those deductions, if your dont have a separate kitchen, raises a lot of red flags and is not worth the hassel to claim these deductions.

My best advise is to get an accountant and ask them.

Ruth0209 Posted 7 May 2009 , 2:27pm
post #6 of 7

vrmcc1, is that your baby in your avatar? She is one beautiful, precious baby! What a sweet picture! Sorry, off topic, but I had to say that!!

vrmcc1 Posted 7 May 2009 , 5:13pm
post #7 of 7

Thank you.
That was my baby, she is three now!!..time to update my avatar.

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