I have an ebay reselling business at my dad and I's house. he pays all the utilities but doesn't deduct them on his taxes at all. My home office is 162 square feet, plus a storage unit in the basement for materials and products which is 186 sq feet, plus the entry way where i stage shipments ( 100 square feet ).
total: 448 sq feet used for the business
First off, do you recommend taking the standard home office deduction or entering in expenses individually ( separate utilities, rent, internet expenses, etc., ) ? Turbo tax recommends individual expense deduction, not the standard home office deduction
Assuming the individual expense deduction, what can I deduct? We have concluded that the internet is used for 70% business purposes, and the power bill 33% ( because i'm about half the power usage here and approximately 17% is used for personal purposes ). Then we have water, gas/heating, garbage and recycle ( which I use all the time for the business, and sewage. I work probably 12-14 hours per day most days.
Can I deduct water / sewage / trash / gas? What percentages do I assign?
The way I've been calculating it this year is to take the total home expenses and multiply by the percentage of time I use them ( if there is 1500 in power bill expenses and we use it 33.33% of the time for business then my deduction is 500 ) - correct ?
I don't pay my dad rent, technically. If we are calculating home office expenses individually like this how do we account for the cost of storage? Because this 448 sq feet of business use room is not free.... and its really higher than 448 sq feet because I work all over the house.
