Christopher,
When I used to have to do this, I created sub-accounts for expenses which
could be claimed against tax and expenses which were personal but not tax
deducible. My calculations were all external to my accounting using
spreadsheets.
E.g when a utility bill came in I would apportion it on the basis that
applied under the tax rules to home office costs which was basically floor
area percentage x percentage of time used for that purpose and split the
utility bill between the Deductible Expenses and non-Deductiblel expenses on
that basis.
Similarly with car costs, the ratio of business kilometers from the logbook
to total kilometers was used to apportion costs. At the time you had a
choice of a rate /business km or a the relevant fraction of all costs and
you were free to choose whichever was advatageous. The primary records were
maintained in logbooks and transferred an external spreadsheet and the
relevant amounts then recorded in my accounts periodically with a similar
apportionment of the total incurred costs between deductible and
non-deductible expense groups. The logbooks were the primary record and
along with the spreadsheets and account books formed the tax records which
had to be kept for the relevant statutory period.
I currently have a number of income sources which are taxable and some which
are not so I similarly have subaccounts for taxable and non-taxable income.
I assign the income and expenses in each category in accordance with the tax
rules specified by the ATO in my case and then all i have to do when filing
a tax return is fill in the requisite entries. I no longer run a business
other than on a hobby basis so deductions are non-existent now.
I think the working from home allowance will be regarded as income. The
question then arises as to whether it is taxable or not and what costs are
allowed as deductions against it and/or your total income. you could use an
accounts receivable structure similar to the business features (but probably
not those features specifically as that commits you to recording invoices
and bills. E.g something like
Dr Cr
Income:WorkFromHomeAllowance
xx
Asset:AccountsReceivable:WorkFromHomeAllowance xx
and when you receive the actual payment:
Dr Cr
Asset:Bank:Checking xx
Asset:AccountsReceivable:WorkFromHomeAllowance xx
Exactly what you record will depend on the exact conditions and the relevant
taxation rules.
David
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David Cousens
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