Splitting Expenses

[Lyss]

I have two businesses, home daycare (my main income) and an online business, can I spilt an expense between the two? Specifically internet services.

For the daycare I use the internet for planning activities, emailing with parents, and advertising (when I have openings anyway). The other business uses significantly more internet usage. Can I claim less than my T/S for internet (for example 10%) and then a larger % for the other business or do I have to choose between the two?

[sunlight]

Just out of curiosity, what is your online business?

[Mike]

Tom will reply with the best answer but I can tell you what I do.

I've pretty much always had at least 2 different business going and any time there is an expense that is used for both, I split it. As long as it is somewhere near 50/50, I split it in half. If only a small part of the expense is for one of the businesses, I just put it towards the main one, unless it's a big enough expense to make a difference, then I split proportionally.

[Lyss]

Just out of curiosity, what is your online business?

I have a blog

Tom will reply with the best answer but I can tell you what I do.

I've pretty much always had at least 2 different business going and any time there is an expense that is used for both, I split it. As long as it is somewhere near 50/50, I split it in half. If only a small part of the expense is for one of the businesses, I just put it towards the main one, unless it's a big enough expense to make a difference, then I split proportionally.

I read a few posts about doing it 50/50 but we also use the internet for personal use so I'm not sure how that works in. Our personal use is nowhere near as much as business use though. Usually I just take the T/S% for daycare usage but this year the other business income has tripled and I ended putting much more time in to it.

[TomCopeland]

two businesses

I have two businesses, home daycare (my main income) and an online business, can I spilt an expense between the two? Specifically internet services.

For the daycare I use the internet for planning activities, emailing with parents, and advertising (when I have openings anyway). The other business uses significantly more internet usage. Can I claim less than my T/S for internet (for example 10%) and then a larger % for the other business or do I have to choose between the two?

Yes, you can split internet and other business expenses between two businesses. Using your time-space % for your day care business makes sense. Otherwise, you need to keep some records to show how much of the expense was used for each business and how much was personal. So, it could be 30% for one business 10% for another and 60% personal. The point is to have some reasonable way of allocating between these three uses.