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Posted by Phoebe Roberts, EA on January 25, 2007, 2:24 am
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Learn wrote:
Disclaimer that you're apparently asking about Canadian
taxation, which I know absolutely nothing about.
> I use a car for both personal and business use. (Not owned
> by me). Should I calculate the number of kilometers to a
> clients destination and then compute how much gas was used?
This is not the right method under US tax law. I have no
opinion on whether it's the right method under Canadian tax
law.
> How should I be accounting fort he expenses?? Under which tax Line:
>
> T2124 Business: Other Auto Expenses
> T2124 Business: Auto Fuel and Oil
The second is the one I'd choose. Huge caveat - under US
tax law, assigning fuel expenses to that tax item in
Quickbooks would likely not result in an accurate tax return
if you simply imported Quickbooks into TurboTax. You should
ask a local CA who works with Quickbooks the best way to set
this up.
> 1.) Cleaning Products, (business is a cleaning Service)
> 2.) Quick Books Tax Software
>
> T2124 Business: Business Other Expenses
> T2124 Business: Other Costs
> T2124 Business: Office Expenses
> T2124 Business: Supplies
1) Supplies
2) Office Expenses
> In the event that I use a cell phone for both personal and
> business use how would I divvy up and separate the expense
> in an accounting software if I pay a flat monthly fee? Would
> i just calculate the percentage of personal calls vs
> business calls based on minutes? Then use this formula for
> the rest of the year's invoices?
>
> Would i use the following Tax Line?
> T2124 Business: Telephone Utilities
For US tax purposes, calculate the percentage of personal
vs. business based on minutes, and use that formula for that
month. Repeat for the remaining months. The line you've
proposed is appropriate. However, assuming that you're
keeping track of both the deductible and non-deductible
portions, you need a second account to book the
non-deductible (personal) portion to. The CA who tells you
how to book the fuel expense can advise you about this, too.
Phoebe :)
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