This is my first year filing taxes for daycare. Do I understand this right: I can depreciate household items used for daycare even if I bought them before I started daycare? Does this apply to refrigerator, stove, microwave etc? Do I need receipts?

Reply

Yes, you can depreciate all of your household items used in your business, including appliances. You don't need receipts. Take pictures. Here's my article about this:http://www.tomcopelandblog.com/2011/...ave-money.html

Reply

Tom: I've been doing daycare for almost 6 years and have never depreciated my home or contents (didn't have good cpa's and just found out about this recently). I'm VERY overwhelmed at the idea of conducting a household inventory of my 2900 sq ft home... You said to use yard sale or thrift store prices for items I don't have a receipt for, but the prices in my area vary greatly. A nice couch can easily go for $200 or $300... is that reasonable? Our kitchen table & chairs would probably sell for $300 or $400... I don't want to put down too much :/

Reply

You don't have to inventory everything if you don't want to. To make it easier, just inventory the big items (furniture, appliances, equipment, etc.). Don't worry too much about how to value the items. Your estimates sound find. Since you haven't depreciated your home, you want to be sure to use IRS Form 3115 and claim all past depreciation on it. See my article as to why this is so important:http://www.tomcopelandblog.com/2011/...your-home.html

Reply

I didn't know that I can depreciate things such as microwave, refrigerator, dryer ect. I've been doing daycare for alot of years, our fridge is aprox. 4 years old now, can I still use the time space percentage?

Reply

You can go back and claim the previously unclaimed depreciation on all of your items, by using IRS Form 3115. See my article on how to do this: http://www.tomcopelandblog.com/2011/...ductions-.html

Reply