I am a newbie (part-time 16-20hrs/week) and use a small designated area of my home as an office. I live in a rented property and wondered if anyone could advise on what portion/percentage of rent can be allocated to the business.
I look forward to feedback.
Regards, Ann
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Ann Murphy
ATM Business Services Ltd
Double check with the IRS but I believe that as long as the area is designated as business only you can write off that section. To calculate, divide the square feet of your office space by the total square feet of your rental's living space. You would write off that percentage of your rent.
e.g.
Office 100 sq ft (divided by)
Living space 1000 sq ft
equals 10% of your living space is designated office
Monthly rental $1000
Monthly utilities $100
total $1100 monthly cost x 10%
= $110/mth office 'rental' expense write-off.
Many thanks for feedback Lily. I put the query to my accountant (I'm UK based). She said it was determined by no. of rooms excl bathrooms/kitchen in property and hours per day used for business. For my case it equated to 4% rent and 25% heating/lighting. Thank goodness for accountants.
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Ann Murphy
ATM Business Services Ltd
Sounds like the UK rules and US rules are different. And I completely agree - thank goodness for accountants! Since I am a bookkeeper and NOT an accountant, I make sure all of my clients and I have one to work with, ourselves.
Running Costs: Rent
Lily Chambers, The Virtual Office Goddess, LLC
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