Tax time FYI

It's my first year with a business, so like everyone else I'm dealing with the whole first time tax questions... I just wanted to share something I learned today that really caught me by surprise, based on some comments I've seen on here and from other face painters.

According to my mom (the CPA tax accountant), the only way I can claim mileage from my home to a gig on my taxes is if I have a DEDICATED home office. That means that I need a room that is specifically used for my business, and nothing personal (ie: bed, tv, games, etc). So in my case, I have a spare bedroom that is primarily my office, where I keep my face painting supplies & gear, my other art supplies, my desk, etc. But it also has a spare bed in there, which makes my "home office" not count with the IRS. Technically, according to the federal government, the first drive from your home to work is just your commute and does not count. So if you go straight from your home to a gig, that mileage is just your "commute"... now if you went from one gig to another that could count as "business mileage". If you have a room that counts as a home office than you can start your day at work and then go to a gig and it will count on your taxes.

It's a pretty silly rule in my opinion, and probably a technicality that most people ignore, but my parents are good accountants that do things by the book, and since they have personal knowledge of my office situation, they can't pretend that they don't know about the bed. So I pretty much found out today that I can't claim mileage for almost ANY of my driving. The only things that do count is if you are traveling to a conference or class or something like that. OR if the gig is out of your general area (they said 50 miles or more away) then you can claim that. I had one gig that was about 65 miles so I got that one.

I just wanted to let everyone know... if nothing else it did save me a few hours of going back and checking mileage for every gig!

Move your bed.......? Sounds like a quick solution, lol!

Too bad I don't have enough rooms for a home office. My kitchen is my Home office"

That's interesting.

I don't believe that CRA (Canada Revenue Agency) has the same rules, but, my office is soley my space - no bed (it is the smallest upstairs bedroom) just three computers, two printers, a scanner, three sets of shelves, two desks, two filing cabinets, two tables... storage, stuff and paperwork.

I know my accountant pro-rates my mortgage and utilities based on my "office" use in the house, and, all my car expenses are submitted.

My car is registered for business use and I have business use insurance on it, all business related use is recorded and submitted.

My dad is an accountant... in Canada, if you have a home business, you can claim 10% (I think) of your home expenses (mortgage interest, utility expenses, etc.) and all of your kilometers. I don't keep track of my kilometers right now because I have so much other stuff I can claim compared to my income, that it doesn't matter. So, in Canada, no you don't have to have a dedicated separate office room, it is presumed that a home business is going to take up X amount of your home space.