Hi,

2012 was the first year for my home daycare. I got the redleaf calendar and kept track of everything. Now I am reading up on this website (and waiting for the 'family child care 2012 tax book and organizer' to arrive in the mail) to understand how to actually file my taxes.

I haven't calculated everything yet but given startup costs (and startup enrollment levels) I expect that when I do I will have a substantial net loss. In 2011 only my husband worked and we itemized our joint return. The way I understand it, I am supposed to claim a portion of mortgage interest and real estate taxes (as well as utilities and home depreciation) against my business income - even if my net loss turns out to be greater than the sum of those items... and then my business income cannot be less than zero.

So when you put things together, we will be reporting:

1. my net loss which may carry over but for this year counts as zero
2. my husband's income just like last year - except there will be less mortgage interest and real estate taxes to itemize

.... which means all else being equal, my business loss will cause our taxes to be higher.

Is the above correct, or am I missing something? For instance, am I allowed to not claim the mortgage interest and real estate taxes against my business income, and only claim the utilities and depreciation instead?

Thanks.

Heather

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