Breaking Down Expenses

[TheGoodLife]

So I have another tax question I'm sure I've read that you claim the taxes for business purchases. If I have a receipt that is divided between 2 different types of expenses (activities and cleaning supplies, or some 100% and some T/S) what do you do about the taxes? Should I just leave it off? TIA!

[Country Kids]

I split the receipt of between the two expenses. Say I have cleaning supplies and crafts on one receipt.

I take a highlighter and highlight with two different colors the expenses. Then I enter what the cleaning supplies add up to and same with the craft supplies.

Everything doesn't have to be in the same category on a receipt.

[TheGoodLife]

I split the receipt of between the two expenses. Say I have cleaning supplies and crafts on one receipt.

I take a highlighter and highlight with two different colors the expenses. Then I enter what the cleaning supplies add up to and same with the craft supplies.

Everything doesn't have to be in the same category on a receipt.

But what do you do about the taxes you paid? Split them, or just not add them in?

[kluna1014]

I usually either figure out the tax, or I just skip the tax all together because it is sometimes more of a hassle to figure out the taxes than it's worth claiming.

[TomCopeland]

Sales tax

But what do you do about the taxes you paid? Split them, or just not add them in?

Two methods: One you figure out the percentage of business expenses on each receipt, use that percentage on the sales tax.

Second, add up all your expenses at the end of the year for receipts that are split, and calculate the percentage of sales tax that is business and multiply it by the total sales tax.

You don't want to leave out claiming sales tax. In one audit I was involved in, a provider hadn't claimed any sales tax. When I had her go back and figure it out, she claimed several hundred extra dollars of business deductions.

[Jewels]

I never split a receipt in 2 categories, I pick one category whatever there is more of, and just put it all under that. To much unnecessary work to split a reciept up that much, at least for me: )

[TheGoodLife]

I never split a receipt in 2 categories, I pick one category whatever there is more of, and just put it all under that. To much unnecessary work to split a reciept up that much, at least for me: )

That was another question I had- How important is it to separate the different classifications of expenses that fall under "other expenses" for Form 8829? as long as the math is done correctly, would it matter if I had an activity item included in the cleaning supply column? Wouldn't it all add up to be the same?

[TomCopeland]

Expenses

That was another question I had- How important is it to separate the different classifications of expenses that fall under "other expenses" for Form 8829? as long as the math is done correctly, would it matter if I had an activity item included in the cleaning supply column? Wouldn't it all add up to be the same?

Only put expenses on Form 8829 that directly relate to the house. Put cleaning supplies on Schedule C. If you show a loss on Schedule C you won't be able to claim some or all of Form 8829 expenses (they can be carried over to the next year). By putting your cleaning supplies on Schedule C you will always be able to claim them, even if you have a loss.

[TheGoodLife]

Only put expenses on Form 8829 that directly relate to the house. Put cleaning supplies on Schedule C. If you show a loss on Schedule C you won't be able to claim some or all of Form 8829 expenses (they can be carried over to the next year). By putting your cleaning supplies on Schedule C you will always be able to claim them, even if you have a loss.

Ugh, I knew that- it was late when I was typing Thanks Tom!

[Jewels]

Only put expenses on Form 8829 that directly relate to the house. Put cleaning supplies on Schedule C. If you show a loss on Schedule C you won't be able to claim some or all of Form 8829 expenses (they can be carried over to the next year). By putting your cleaning supplies on Schedule C you will always be able to claim them, even if you have a loss.

But that only matters if you claim a loss right, I never claim a loss, so does it matter if I Mixed them? Usually when I pick a category its between toys/supplies I just choose one, but I'm guessing ive combined household items and cleaning supplies also, but again I don't foresee ever claiming a loss.

[TomCopeland]

Expenses

But that only matters if you claim a loss right, I never claim a loss, so does it matter if I Mixed them? Usually when I pick a category its between toys/supplies I just choose one, but I'm guessing ive combined household items and cleaning supplies also, but again I don't foresee ever claiming a loss.

If you aren't claiming a loss then it doesn't matter if your expense shows up on Schedule C or Form 8829.