Recording Deductions for Home Office Expenses

Experienced Cover User Chappie
14 Posts
Experienced Cover User

Recording Deductions for Home Office Expenses

Hi there all,

 

Can someone explain the steps to record home office deductible expenses as currently allowed by New Zealand IRD in MYOB Essentials?

 

IRD allows you to deduct expense for items such as rates, power, insurance and deduction % is based on size of your home office space.  In my case, I have work this out to be 11%.

 

So for example, let's say rates were $4,000 (GST inclusive) for the income tax year.  I need to deduct the GST exclusive amount ($3,478.27) x 11% (0.11) = $382.60.   How do I enter this deduction into Essentials?

 

I also need to record the GST component adjusted for 11%, so $521.73 x 0.11 = $57.39.  How do I record this in Essentials?

 

Many thanks, 

Chappie

3 REPLIES
Ultimate Partner jenniek
2,105 Posts
Ultimate Partner
New Zealand

Re: Recording Deductions for Home Office Expenses

Hi @Chappie

It depends if you have paid this account out of your Essentials tracked bank account. If you have then, you would allocate 11% of the bill to an expense account and the balance to drawings. If you have paid for these personally and now jsut wanting to claim the expense, a journal entry would be required. Alternately you could provide this information to your accountant for year end, and he will make an adjustment, then advise you what to adjust on your next GST return.

Regards,
Jennie Kingma
JK Business Systems Ltd, Hamilton, NZ
Email: jennie@jkbusiness.co.nz
Experienced Cover User Chappie
14 Posts
Experienced Cover User

Re: Recording Deductions for Home Office Expenses

Hi Jennie

 

Thanks for your reply.

 

I have paid personally so journal entry is needed.  I have created an expense account called Home Office to record the expense as a debit.  For the credit I assume I use my Loan from Business Owners account (credit card type account) ?

 

Regards,

Chappie

Ultimate Partner jenniek
2,105 Posts
Ultimate Partner
New Zealand

Re: Recording Deductions for Home Office Expenses

Hi @Chappie

Yes - the other sie to the transaction is Capital Introduced

DR Home Office Exp

CR Capital Introduced

If you want to claim the GST also - then don't forget to include GST on the Home exp line only

Regards,
Jennie Kingma
JK Business Systems Ltd, Hamilton, NZ
Email: jennie@jkbusiness.co.nz
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