Real-Life Math
You knew when you opened your bed and breakfast that you would have
to spend a lot of time doing paperwork. And most of the time, the paperwork
is pretty standard and easy to do.
But it's tax time, and you
prefer to do your taxes yourself. You've spent your quiet time during
the last week trying to figure out what your deductions will be.
Of
course, with the new tax software out for businesses, most of the work is
easy. Once you have them totaled, you plug in your numbers from the receipts
that you collected throughout the year. Then the software fills in all of
the calculations for you.
That is, until you reach the area where you
have to figure the percentage of the total square footage of your house that
is used for business. This number will be used to determine the amount of
electricity, gas and water that you can claim as business expenses.
With
the exception of 3 rooms in your house, you use it all for business. But those
3 rooms are used exclusively for your personal use. They can't be claimed
as business usage. There is also a closet and a bathroom that you use exclusively.
You
have to determine the actual amount of square footage that is used for business
purposes. Your house has a total of 3,600 square feet.
And the rooms
you don't use -- a den, a bedroom and a sitting room -- have different
square footages. The den is 150 square feet, the bedroom is 100 square feet
and the sitting room is 115 square feet.
The additional bathroom is
about 50 square feet, as is the closet that you use. What percentage
of the total square feet can you claim as a business expense?