How to apportion expenses across businesses

OldStace

Can anyone suggest how I might apportion expenses like utilities, phone, rent etc recorded in our personal accounts across to my wife's and my business accounts for tax purposes? Example, $100 in utilities category in personal account, transfer $33 to utilities category in my business acount and $33 to utilities category in my wife's business account.

Mikeg

OldStace,
Can only speak to the US. So if that is the case then:
First you must determine a reasonable amount to allocate from personal to business. If these businesses are are shown on your personal return, then Form 8829 (Home Office) is the methodology your are going to want to follow. To get these apportioned amounts on the business there are 1 of 2 ways. First and easiest is to do a journal entry, where you debit the shared expense and credit owners equity. The reason being is that cash was not paid by the business for an expense. The second way would be to actually transfer cash either by creating a bill in Wave or some other billing method. You would then transfer the cash from the business to the account where the actual expense was paid. If they are S-Corp's then technically, you should have an accountable plan in place in order to reimburse yourself. Hope that makes sense.
Mike G, CPA
www.mgfinancial.net
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