Fence For Yard And New Van For Day Care

[RachieT]

I have not started my day care yet but in preparation for opening on May 1st we are fencing our yard and buying a mini van. Can these be written off if we get them before we open? How does it exactly work with write offs?

It's not exactly a write-off...it's a depreciation. You depreciate it over time on your taxes. Yes, it counts even though you haven't opened your business yet. However, if you use your yard and the mini van outside of day care hours (for personal use) you can only claim part of it...either actual use percentage or using your time/space percentage. If you do not use them at all outside of day care...you can depreciate the whole thing.

[TomCopeland]

If you put up a fence before your business begins, start depreciating it once the business does begin. Fences must be depreciated over 15 years. If you use it 100% for your business you can depreciate 100% of the cost. If you also use it for your family, depreciate only part of the cost.

When claiming expenses for your van you can use either the standard mileage rate ($.51 a mile for 2011) or the actual use method. In either case you need to track how many business miles you drive in 2011.

See my 2010 Family Child Care Tax Workbook and Organizer for details about both questions.