Small Business Tax Dictionary
You didn't get into business to become a tax expert. So use our helpful guide to understand all the terminology instead
Apportionment
Apportionment is the process of dividing home office expenses between personal and business use. When a space in the home is used for both purposes, apportionment helps determine the percentage of costs that can be claimed as a business deduction. This percentage is usually calculated based on the floor area used for business activities compared to the total area of the home or the time spent working in that space. Accurate documentation and a clear method of calculation are vital to ensure compliance with tax regulations.
