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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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  #1  
Old 04-08-2019, 08:56 AM
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Default Ugh, Taxes Just Got Done

Oh my gosh I hate having my taxes done. I don't pay quarterly, so I guess I have to expect it.

What did everyone end up with for t/s%? I ended up with 34.31%
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Old 04-08-2019, 09:14 AM
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Default Quarterly Taxes

So...I guess I didn't realize that I need to pay quarterly taxes and now I'm freaking out about penalties. I guess some lessons are more expensive than others. This was my first full year of daycare and I just didn't comprehend that I should pay throughout the year. Oh well.

I'm getting my taxes done this weekend, but I used Tom Copeland's Tax workbook and figured my t/s is about 40%
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Old 04-08-2019, 10:51 AM
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Quote:
Originally Posted by lovemykidstoo View Post
Oh my gosh I hate having my taxes done. I don't pay quarterly, so I guess I have to expect it.

What did everyone end up with for t/s%? I ended up with 34.31%
I used to be in such a hurry to get my taxes done when I knew I was getting money back(when I had 2 dds in college it was great) but now that I know I'm paying in every 1/4, I drag my feet. I just got mine done a week ago. This year was better though, due to a couple changes with tax rules plus I didn't make as much.
I think my T/S% is a hair over 30%.
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Old 04-08-2019, 11:15 AM
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Mine was 32.7% this year.
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Old 04-08-2019, 11:54 AM
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I've never paid quarterly either because it seems so much more complicated. I am starting this year. I've printed the 2019 Form 1040-ES and am still reading. I hope to have it figured out by Wednesday because the first 2019 payment is due April 15th.
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Old 04-08-2019, 01:03 PM
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My TS is 40%.
It was at 35-38% in the past until I realized that storage space counts!

I'm still finishing up my taxes. I'm super frustrated with Turbo Tax this year. It seems like I've run into so many bugs in the system. I always thought I knew taxes pretty well, but some of these changes (and new home circumstances for me) have me scratching my head.

I have paid in estimated taxes in the past when I knew I wasn't going to buy much in the coming year. But, with a spouse who is W2'd, it doesn't make much sense to do it (for me). BTW, I've never seen or heard of anyone actually being penalized for underpayment. I don't think we make enough to justify the IRS coming after the added peanuts.
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Old 04-08-2019, 07:08 PM
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Originally Posted by Snowmom View Post
My TS is 40%.
It was at 35-38% in the past until I realized that storage space counts!

I'm still finishing up my taxes. I'm super frustrated with Turbo Tax this year. It seems like I've run into so many bugs in the system. I always thought I knew taxes pretty well, but some of these changes (and new home circumstances for me) have me scratching my head.

I have paid in estimated taxes in the past when I knew I wasn't going to buy much in the coming year. But, with a spouse who is W2'd, it doesn't make much sense to do it (for me). BTW, I've never seen or heard of anyone actually being penalized for underpayment. I don't think we make enough to justify the IRS coming after the added peanuts.
I had a pretty good year last year. Very few expenses. The IRS is definitely coming after me

I think I'll buy some new appliances, you know, for the daycare
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Old 04-09-2019, 06:48 AM
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Quote:
Originally Posted by Snowmom View Post
My TS is 40%.
It was at 35-38% in the past until I realized that storage space counts!

I'm still finishing up my taxes. I'm super frustrated with Turbo Tax this year. It seems like I've run into so many bugs in the system. I always thought I knew taxes pretty well, but some of these changes (and new home circumstances for me) have me scratching my head.

I have paid in estimated taxes in the past when I knew I wasn't going to buy much in the coming year. But, with a spouse who is W2'd, it doesn't make much sense to do it (for me). BTW, I've never seen or heard of anyone actually being penalized for underpayment. I don't think we make enough to justify the IRS coming after the added peanuts.
I just have 1 room that I don't count in my space. My daughters room. She is going off to college though. How much stuff do I need to store in her room to be able to count it? A container of books good enough? lol
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Old 04-09-2019, 08:46 AM
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Default space%

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Originally Posted by lovemykidstoo View Post
I just have 1 room that I don't count in my space. My daughters room. She is going off to college though. How much stuff do I need to store in her room to be able to count it? A container of books good enough? lol
To claim a room as regularly used for your business it needs to be used more than "occasionally." If you use it 2-3 times per week to go in there to get stuff for your business, that's regularly used. Storage of two books, no.
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Old 04-09-2019, 11:46 AM
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To claim a room as regularly used for your business it needs to be used more than "occasionally." If you use it 2-3 times per week to go in there to get stuff for your business, that's regularly used. Storage of two books, no.
I was just being a smartypants lol. If I keep the portacribs in her closet does that work? I have them in the hall closet now, but would gladly move them if I include that space thereby increasing my t/s%
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Old 04-09-2019, 12:28 PM
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I just realized I could count my basement and garage in my total square footage if I store things in those areas, which I do. This would more than double my square footage so I thought it would really bump up my t/s. My husband didnít think that would change it much. He thought getting my time up would change it a lot more. I do only work 4 days a week so maybe that is why?
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Old 04-09-2019, 01:45 PM
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I just realized I could count my basement and garage in my total square footage if I store things in those areas, which I do. This would more than double my square footage so I thought it would really bump up my t/s. My husband didnít think that would change it much. He thought getting my time up would change it a lot more. I do only work 4 days a week so maybe that is why?
I didn't think about garage. When I figure it on KidKare, it asked total square foot of home (which I figured just on the house not basement or garage), then it asks how much is 100% daycare, which my playroom is and then which part is not used. So I have an 1800 square foot home, my daycare room is 144 square feet, my daughters room is 144 square feet that I don't use at all. I keep all outside toys in the garage along with bubbles, chalk etc. How do I figure all of that?
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Old 04-10-2019, 04:11 PM
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Default time-space%

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Originally Posted by lovemykidstoo View Post
I didn't think about garage. When I figure it on KidKare, it asked total square foot of home (which I figured just on the house not basement or garage), then it asks how much is 100% daycare, which my playroom is and then which part is not used. So I have an 1800 square foot home, my daycare room is 144 square feet, my daughters room is 144 square feet that I don't use at all. I keep all outside toys in the garage along with bubbles, chalk etc. How do I figure all of that?
Include the garage and basement in the total square feet of your home. They are probably used regularly for your business. If the 144 square foot room is used exclusively for your business, enter it that way in KidKare. Don't count the daughter's room as regular use. Include the rest of the space as regular use. Once you put in your hours into KidKare it will automatically calculate your time-space%.
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Old 04-11-2019, 08:48 AM
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My t/s% was just a shy over 25%. Quite a bit less then some of you, and I thought mine was high!
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Old 04-11-2019, 12:39 PM
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So... just finished my taxes and since we talked about penalties, I thought I'd update here.

My situation: Married, filing jointly. Spouse is a W2 employee. Did not pay any estimated taxes for 2018. Sold and bought a new home (some capital gains in there) with quite a bit of expenses for the daycare at the new residence. MN full year resident.

Federal: $80 refund
State: Owe $600 with a $5 underpayment penalty

First time that's ever happened.

I was surprised on all the changes to credits and deductions this year. But, I ended up not doing too bad since we usually owe Federal $500-$1000 in the past.
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Old 04-11-2019, 06:02 PM
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Originally Posted by Snowmom View Post
So... just finished my taxes and since we talked about penalties, I thought I'd update here.

My situation: Married, filing jointly. Spouse is a W2 employee. Did not pay any estimated taxes for 2018. Sold and bought a new home (some capital gains in there) with quite a bit of expenses for the daycare at the new residence. MN full year resident.

Federal: $80 refund
State: Owe $600 with a $5 underpayment penalty

First time that's ever happened.

I was surprised on all the changes to credits and deductions this year. But, I ended up not doing too bad since we usually owe Federal $500-$1000 in the past.
Oh my gosh that would be a dream. My husband is a W-2 employee, did have a carpet cleaning business that he worked very shortly and showed a slight loss on that. We did have a $8,000 write off debt with a cc company so we had to take a hit with that, but we owed the federal $3,900 and state $1400. I don't do quarterlies either. Am I doing something majorly wrong?
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Old 04-11-2019, 10:07 PM
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You can get an underpayment penalty? What does this mean? I was under the impression that making quarterly payments was optional. I make them as I don’t want to be paying in 6K every year. My estimated payments were off and I owed like $1.3K this year and that was no fun but I don’t think I paid any penalties.
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Old 04-12-2019, 08:34 AM
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Default I'm so glad I'm not the only one who is majorly confused.

We're getting our taxes done tomorrow. I'm going to ask our tax person what I should have done last year/should do this year. If I get and good information, I'll let you guys know.
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Old 04-12-2019, 12:08 PM
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You can get an underpayment penalty? What does this mean? I was under the impression that making quarterly payments was optional. I make them as I donít want to be paying in 6K every year. My estimated payments were off and I owed like $1.3K this year and that was no fun but I donít think I paid any penalties.
Estimated taxes are definitely not optional. I don't like paying quarterly so I adjusted my husband's withholding to cover my taxes as well, but I still keep an eye on my income to be sure we're paying enough.

From the IRS website:

The United States income tax system is a pay-as-you-go tax system, which means that you must pay income tax as you earn or receive your income during the year. You can do this either through withholding or by making estimated tax payments. If you didn't pay enough tax throughout the year, either through withholding or by making estimated tax payments, you may have to pay a penalty for underpayment of estimated tax. Generally, most taxpayers will avoid this penalty if they either owe less than $1,000 in tax after subtracting their withholding and refundable credits, or if they paid withholding and estimated tax of at least 90% of the tax for the current year or 100% of the tax shown on the return for the prior year, whichever is smaller. There are special rules for farmers and fishermen, certain household employers and certain higher income taxpayers. For more information, refer to Publication 505, Tax Withholding and Estimated Tax.
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Old 04-19-2019, 07:12 PM
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Default t/s

mine was 37%. Everyone needs to read Tom Copeland's audit archives to see what gets you audited. Practice aggressive tax avoidance NOT evasion/fraud.
http://tomcopelandblog.com/irs-auditsdocuments
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Old 04-20-2019, 06:20 AM
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mine was 37%. Everyone needs to read Tom Copeland's audit archives to see what gets you audited. Practice aggressive tax avoidance NOT evasion/fraud.
http://tomcopelandblog.com/irs-auditsdocuments
Is this in the Record-Keeping Guide?
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Old 04-20-2019, 06:23 AM
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We're getting our taxes done tomorrow. I'm going to ask our tax person what I should have done last year/should do this year. If I get and good information, I'll let you guys know.
That would be great!! Good luck!

When I had mine done, I had these categories listed on my return:

Utilities (electric, gas, water)
Cable/Internet
Business Supplies/toys
Activity Expenses
Gifts
Household (paper products, cleaning, light bulbs, basically anything I bought for the house including towels, toaster, utensils).
Mileage
Property taxes
Daycare Insurance
House Insurance



Tom should I have more categories than this? Spread them out more? Is there any I'm missing that I could claim?
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Old 04-21-2019, 11:00 AM
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Is this in the Record-Keeping Guide?
There is a comprehensive discussion of how to calculate your time-space percentage in my Family Child Care Record Keeping Guide.
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Old 04-21-2019, 11:03 AM
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Originally Posted by lovemykidstoo View Post
That would be great!! Good luck!

When I had mine done, I had these categories listed on my return:

Utilities (electric, gas, water)
Cable/Internet
Business Supplies/toys
Activity Expenses
Gifts
Household (paper products, cleaning, light bulbs, basically anything I bought for the house including towels, toaster, utensils).
Mileage
Property taxes
Daycare Insurance
House Insurance



Tom should I have more categories than this? Spread them out more? Is there any I'm missing that I could claim?
It doesn't matter what expense category you put your deductions in. Your categories are fine. However, you can also deduct: mortgage interest, house depreciation, repairs, food, furniture, appliances, etc. See my article for a longer list:http://tomcopelandblog.com/whats-ded...-care-business
My Family Child Care Record Keeping Guide lists over 1,000 allowable deductions.
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