Auditors use Auditing Standards and Accountants tend to use Financial Reporting Standards and then there are things which are of interest to both sets of professionals which may be taxation and filing of returns.
So, be that as it may, let me provide an example of a person, Em, who has property and who provides accounting services.
Now Em, does not belong to a professional body such as ICATT, however she is familiar with Peachtree, Excel and a few other programmes as we have seen her read some books on publishing during her lunchtime.
However at that time, we did not have use for those services, as the department with which she worked, being the accounting department, our days were filled with data entry, filing, and a few other things.
During one of the years in which we worked together, we started talking about expenses which could be allocated to a home office, some of which may be similar to home expenses or rather Em, had to listen to my talking to her about the topic whether she was interested in it or not....
So, with her providing accounting services from her home, Em, had a space which was designated for accounting, meeting with clients, thus some of the rent which she paid could be allocated to this cost under her business.
I assumed everyone at the place where we worked, paid rent wherever they lived or had a mortgage which we did not talk about as it implied wealth.
Then there were the other expenses, such as sugar, coffee, tea, milk, kettle and cups. One of the concepts which we covered was:
When you are buying for your home, buy one set of items for the office and one set for your personal use.
Keep both bills to show that you were not consuming the office supplies in your home.
Over time, assets could be added to the office, such as a refrigerator to store the milk.
Depending on the income of the business as if there was not much income coming in, then the purchase of a mini refrigerator could be questioned on the basis of source of funds we could look at the other assets.
For example I had a small laptop which could have been expensed in one year or depreciated over a number of years depending on the income which was being generated during those years.
Luckily, I "worked" part time at a Parish Office and with their understanding, I was able to access the office during hours outside of their regular hours to perform accounting duties.
During that time, at the Parish Office, I had air conditioned office space, access to a refrigerator, kettle and office supplies, hence it would have been difficult for me to claim those types of expenses at my home, electricity, internet, as most of my days were spent outside of home or out of the country in some instances.
However there were times when I used the home supplies for research and writing and it may have been permitted under those occasions.
So, for those of you with home offices how does your space, the cost and the value compare to your income?
Do you include in your costs, the maid or cleaning services, access of guests or the employees to the bathroom or the entry way or other common service costs?
For those with taxis or who generate income from the use of vehicles, do you pay rent for the space or pay for water rates as part of the business costs?
Let me know your thoughts, the end of a financial year may be approaching for some of you, so get an opinion and reduce your taxes....
No comments:
Post a Comment