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Daycare and Taxes All things related to Taxes and running a Daycare post here. Topics of tax exemptions, forms, filings, tax write offs, IRS etc.

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Old 10-11-2012, 07:45 PM
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LWICD LWICD is offline
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Default New Daycare Center Not in Home

I am finding a lot of information about in home childcare however I am opening an actual center that is not my home. It is all new construction. I am looking for some assistance with some questions that I have.

To get it all started. What things should I be keeping track of during the construction process that will be deductible? Please take note that we started construction in September of this year and do not expect to be open before the end of the year. Therefore we have all these cost but no income or payroll. We have been buying supplies as well here and there for the daycare and we use our vehicle that we also travel to work in to run these errands and to stop at the center to meet with workers and track progess of the construction.

We will build of of this to bring up other questions. We are setup as an LLC already as well.
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Old 10-12-2012, 05:17 PM
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Default center expenses

Keep track of all expenses associated with building your center and any expenses associated with the business (supplies, mileage, etc.). If you aren't ready to open until 2013, claim these expenses in 2013.
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Old 10-14-2012, 09:44 AM
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ok thanks for that information. So your saying just file my regular personal taxes this year and move all the other expenses to next year. Does it matter that the statements and receipts are dated for this year? Also if I were to claim these expenses this year but had no profit would I get a pretty nice return? This may would help to buy some last minute supplies although I know it would be income on the next years return

Another question on the food program. I was told by my area coordinator that they often pay more than what is needed for childcare centers and that some of the centers actually use that money to pay the cook? If this is doable what would be the best way to do this in order for it to be taxed correctly both from an employee standpoint and revenue standpoint
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Old 10-15-2012, 08:44 AM
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Default center questions

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Originally Posted by LWICD View Post
ok thanks for that information. So your saying just file my regular personal taxes this year and move all the other expenses to next year. Does it matter that the statements and receipts are dated for this year? Also if I were to claim these expenses this year but had no profit would I get a pretty nice return? This may would help to buy some last minute supplies although I know it would be income on the next years return

Another question on the food program. I was told by my area coordinator that they often pay more than what is needed for childcare centers and that some of the centers actually use that money to pay the cook? If this is doable what would be the best way to do this in order for it to be taxed correctly both from an employee standpoint and revenue standpoint
You can only start claiming business expenses in the year when you are ready to care for children and are telling others you are ready to care for children. If this is 2013 for you, then you can use your 2012 receipts as expenses in 2013. Money you get from the Food Program is taxable income. You can deduct any expenses associated with hiring the cook and the cook must report any money paid him as income.
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Old 12-03-2012, 12:33 PM
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hello tom copeland..

i am reading your blog and i see the instructions on how to "gift" a relative vs making them an employee. In texas, if you operate in a home outside of your own residence, you are considered a daycare center. Would this rule still hold true? My sister is currently assisting in my home but i am thinking about using another home and expanding to a center in order to keep more children.
But if alot of the profit would be required to go towards taxes and workers comp, there really wouldnt be much point.

thanks in advance
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Old 12-04-2012, 12:25 PM
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Originally Posted by ladyquana View Post
hello tom copeland..

i am reading your blog and i see the instructions on how to "gift" a relative vs making them an employee. In texas, if you operate in a home outside of your own residence, you are considered a daycare center. Would this rule still hold true? My sister is currently assisting in my home but i am thinking about using another home and expanding to a center in order to keep more children.
But if alot of the profit would be required to go towards taxes and workers comp, there really wouldnt be much point.

thanks in advance
The IRS would not consider your sister an employee if she helped you out at the center. But, the state of Texas may see this differently, so check with the Texas department of labor to see if you would owe state unemployment taxes or need to purchase workers compensation insurance.
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Old 12-04-2012, 12:55 PM
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Originally Posted by TomCopeland View Post
The IRS would not consider your sister an employee if she helped you out at the center. But, the state of Texas may see this differently, so check with the Texas department of labor to see if you would owe state unemployment taxes or need to purchase workers compensation insurance.
thanks!!
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