Sole Prop, Salary and rent

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  1. #1

    Join Date
    Mar 2008
    Posts
    14

    Sole Prop, Salary and rent

    Hi,

    Can anyone tell me if you can draw a salary from your sole prop business, and is it tax deductible?

    Also, if working from home, is a portion of the rent deductible, and how should you show or declare this?

    Pretty sure these are newbie questions, but this newbie could sure use help!

    Thanks


  2. #2

    Join Date
    Jan 2008
    Posts
    1,966

    You can pay yourself salary, if you so desire. However the profit or loss of the business will be added to your income, so in totality, it makes no difference.
    If you can demarcate, a portion of your home as an office, then it is easier to justify.Even if you cannot demarcate a separate area for the office, you can claim a portion of the rent as business expense. Ultimately it depends on the tax department, how much they allow you to deduct.