Stupid tax question here. Should I do Dayhome groceries separate from my families to make taxes easier? Or is there some kind of formula I can use here?
Bookkeeper? There’s literally an app for that. Just track spending on it. Many of them. Very simple.
You need to have a bookkeeper or an accountant
Or pay for a consultation if you plan to do your own data entry. It's easier and cheaper to get it set up right the first time than to pay for someone to correct it.
It was a different business, but it was easier for me to pay for a few hours of data entry than the brain damage it caused me trying to do it myself. They also keep on top of all the rules that I wouldn't know to look up.
I feel like you should have a separate bank account for your business.
Yes, all your business expenses should be separated. Business expenses are deductible against your revenue. Personal expenses are not. If you don't keep them separate you are either going to pay way more in tax if you don't deduct the business expense or commit tax fraud if you try to deduct your family grocery expense with it. There is no formula for this.
Open up a separate bank account (it doesn't have to be in the business name, just a separate account at the bank you are using is fine, this can usually be done online easy enough) and put all your business payments and revenue through that one account to keep them separate from your personal spending. Be 100% diligent about using the right account and keeping receipts. At tax time it is much easier to sort through one account of business expenses vs an account of a mix of personal and business expenses (this will also end up costing a tonne if you want a bookkeeper to do it as they will have to ask you about every line).
When I say diligent about using the right account I mean diligent...as in you put the grocery through in two seperate transactions if you are buying business groceries and home groceries at the same time. Even if you are buying only one personal item you do not put that with the business groceries. If you forget your personal card at home do not use the business account for that personal purchase "just one time". Every client I have seen that ends up with a huge accounting bill at tax time is because the line between the personal and business expenses gets blurred.
This is at minimum..however it would be best to go talk to a bookkeeper and get a good system set up before it becomes an issue.
Keep them separate.
My wife spends a few days every year itemizinf and separating the day home expenses. And complains about it every time. And says she'll stay in top of it throughout the year. And then doesn't. Repeat.
Yes. You need to keep them separate. While there's a formula for your use of home, it doesn't extend to groceries.
You can make your life really easy by having a separate bank account and credit card so that business and personal expenses never touch.
I second what /u/jbalberta123 said. But to answer your question, everything should be separate. EVERYTHING.