Daycare.com Forum Force of Nature Disinfectant

Go Back   Daycare.com Forum > Daycare and Taxes

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.

Reply
 
Thread Tools Display Modes
  #1  
Old 01-13-2011, 10:34 AM
My4SunshineGirlsNY's Avatar
My4SunshineGirlsNY My4SunshineGirlsNY is offline
Advanced Daycare.com Member
 
Join Date: Oct 2009
Location: New York
Posts: 575
Default Business Profit Vs. Income Made

Sorry for the multiple questions, this is my first full year in business and what better place to ask than here!

Usually I wouldn't share numbers but I want to make sure my taxes are "normal" for a daycare provider....so far I have income of $18,555 and after the expenses I have entered currently (which lacks my cable bills and depreciation of home) I am showing a profit of only $3700....does this sound "normal"? With this being my first full year in business I had many purchases. Hope this sounds right.
Reply With Quote
  #2  
Old 01-13-2011, 10:44 AM
dEHmom's Avatar
dEHmom dEHmom is offline
Advanced Daycare.com Member
 
Join Date: Dec 2010
Location: Canada EH
Posts: 2,354
Default

I can't honestly be too much help, but to me it does sound about right.
I know if my mother in laws last year of childcare, she made 20 or 25 000 dollars, and knocked it down to about 8 000 after all deductions.
Reply With Quote
  #3  
Old 01-13-2011, 10:46 AM
lvt77's Avatar
lvt77 lvt77 is offline
Daycare Member
 
Join Date: Dec 2010
Location: boonies
Posts: 604
Default

Quote:
Originally Posted by My4SunshineGirlsNY View Post
Sorry for the multiple questions, this is my first full year in business and what better place to ask than here!

Usually I wouldn't share numbers but I want to make sure my taxes are "normal" for a daycare provider....so far I have income of $18,555 and after the expenses I have entered currently (which lacks my cable bills and depreciation of home) I am showing a profit of only $3700....does this sound "normal"? With this being my first full year in business I had many purchases. Hope this sounds right.
I was told by my cpa last year that it is expected to take a loss the first 3 years that you are in business....
My numbers were 23,000 and expenses were 31,000. I bought new computer for DC, tables, chairs, education programs and etc, so this year i won't be spending as much...
Reply With Quote
  #4  
Old 01-13-2011, 07:09 PM
Abigail's Avatar
Abigail Abigail is offline
Child Care Provider
 
Join Date: Jul 2010
Location: North Dakota
Posts: 2,414
Default

Quote:
Originally Posted by lvt77 View Post
I was told by my cpa last year that it is expected to take a loss the first 3 years that you are in business....
My numbers were 23,000 and expenses were 31,000. I bought new computer for DC, tables, chairs, education programs and etc, so this year i won't be spending as much...
WOW, $31,000 in daycare expenses?! That's a lot....that's more than I make right now. LOL
Reply With Quote
  #5  
Old 01-13-2011, 07:12 PM
Abigail's Avatar
Abigail Abigail is offline
Child Care Provider
 
Join Date: Jul 2010
Location: North Dakota
Posts: 2,414
Default

Quote:
Originally Posted by My4SunshineGirlsNY View Post
Sorry for the multiple questions, this is my first full year in business and what better place to ask than here!

Usually I wouldn't share numbers but I want to make sure my taxes are "normal" for a daycare provider....so far I have income of $18,555 and after the expenses I have entered currently (which lacks my cable bills and depreciation of home) I am showing a profit of only $3700....does this sound "normal"? With this being my first full year in business I had many purchases. Hope this sounds right.
I know you have a "start up" way to calculate things if you already had things before opening daycare. Did you open in 2010 or did you mean you've been open since sometime in 2009 and this is a complete 12 month year? Make sure you follow the rules for purchases over a certain amount ($100 I think?) and depreciate them over time. Sounds like you're very organized.
Reply With Quote
  #6  
Old 01-14-2011, 05:11 AM
My4SunshineGirlsNY's Avatar
My4SunshineGirlsNY My4SunshineGirlsNY is offline
Advanced Daycare.com Member
 
Join Date: Oct 2009
Location: New York
Posts: 575
Default

I opened in Sept. 2009 but found myself buying a lot still in 2010. I have a couple higher priced items I need to fix to the depreciation method. I use Minute Menu and entered it in using depreciation but Minute Menu was still showing it to be TSP on the full amount, not the depreciation amount...anyone know why this is?

It asks for the value when placed in service, so I enter in the value I paid for the item since it's brand new, selected TSP since it's a shared item, then selected the 7 year depreciation as the option it gave me and the half year option since I had it 1/2 the year and when submitted it was still showing the TSP on the full value of the item. Help, anyone??
Reply With Quote
  #7  
Old 01-14-2011, 12:55 PM
AnythingsPossible's Avatar
AnythingsPossible AnythingsPossible is offline
Daycare Member
 
Join Date: Jan 2010
Location: Wyoming
Posts: 799
Default

I must be doing something wrong as my income has never gone down so much after deductions. I average 9 to 12,000 a year with household utilities deductions and everything. I don't know how everyone else accumulates so much in deductions. I usually earn around 36,000 a year, give or take, and still pay taxes on well over 20,000. Different people I talk to tell me I need to find more deductions, but I don't see how without completely scamming the system.
Reply With Quote
  #8  
Old 01-14-2011, 01:18 PM
TomCopeland's Avatar
TomCopeland TomCopeland is offline
Business Author/Trainer
 
Join Date: Jun 2010
Location: St. Paul, Minnesota
Posts: 3,032
Default Profit?

It's not unusual to show a loss your first year in business (start-up expenses, low enrollment, recession, etc.).

Minute Menu doesn't calculate your depreciation. The depreciation rules are too complicated. So, use MM to record your larger expenses and let your tax preparer do the calculations or use my 2010 Family Child Care Tax Workbook to do your taxes yourself.
__________________
http://www.tomcopelandblog.com
Reply With Quote
  #9  
Old 01-14-2011, 06:07 PM
My4SunshineGirlsNY's Avatar
My4SunshineGirlsNY My4SunshineGirlsNY is offline
Advanced Daycare.com Member
 
Join Date: Oct 2009
Location: New York
Posts: 575
Default

Quote:
Originally Posted by TomCopeland View Post
It's not unusual to show a loss your first year in business (start-up expenses, low enrollment, recession, etc.).

Minute Menu doesn't calculate your depreciation. The depreciation rules are too complicated. So, use MM to record your larger expenses and let your tax preparer do the calculations or use my 2010 Family Child Care Tax Workbook to do your taxes yourself.
What I did last year was printed out my Minute Menu reports and gave them to my accountant...all my numbers were already calculated for him. So if I want to add in my depreciated items, can I calculate the depreciation myself and still enter them in MMK so it shows under my Schedule C report?

I read the tax rule for 2010 depreciation, I can take 1/2 the depreciated value the first year my item is purchased and the rest I can depreciate over the allowed depreciation time...So I guess I just enter in the cost of 1/2 the depreciated value then, correct? Wow I have spent a lot of time yesterday and today reading...I'm getting there! Still so much to read.
Reply With Quote
  #10  
Old 01-14-2011, 06:18 PM
cillybean83's Avatar
cillybean83 cillybean83 is offline
Daycare.com Member
 
Join Date: Dec 2010
Location: Tennessee
Posts: 543
Default

2010 was my first year, I didn't have enrollment until MAY! I lost $800 for the year, not bad considering what it could have looked like! Hopefully I'll turn a profit in 2011!
Reply With Quote
  #11  
Old 01-14-2011, 07:24 PM
TomCopeland's Avatar
TomCopeland TomCopeland is offline
Business Author/Trainer
 
Join Date: Jun 2010
Location: St. Paul, Minnesota
Posts: 3,032
Default MM records and depreciation

You can't calculate your actual depreciation deduction on MM. Depreciation expenses show up on Form 4562 and then are transferred to Schedule C.

I wrote a blog post about the new 50% additional depreciation rule - http://www.tomcopelandblog.com/2010/...-business.html

To use this rule the item must be purchased new in 2010. You would multiply the cost by your t/s% (assuming it's a shared expense). Then take half the result and deduct it in 2010, and depreciate the other half over the normal depreciation period for that item.
__________________
http://www.tomcopelandblog.com
Reply With Quote
  #12  
Old 01-15-2011, 06:18 AM
My4SunshineGirlsNY's Avatar
My4SunshineGirlsNY My4SunshineGirlsNY is offline
Advanced Daycare.com Member
 
Join Date: Oct 2009
Location: New York
Posts: 575
Default

Quote:
Originally Posted by TomCopeland View Post
You can't calculate your actual depreciation deduction on MM. Depreciation expenses show up on Form 4562 and then are transferred to Schedule C.

I wrote a blog post about the new 50% additional depreciation rule - http://www.tomcopelandblog.com/2010/...-business.html

To use this rule the item must be purchased new in 2010. You would multiply the cost by your t/s% (assuming it's a shared expense). Then take half the result and deduct it in 2010, and depreciate the other half over the normal depreciation period for that item.
So you're saying that I can't make this calculation myself and enter it in under Schedule C on Minute Menu? I would have to just take my calculations on a separate paper and give it to my accountant? Just want to clarify, thank you.
Reply With Quote
  #13  
Old 01-15-2011, 11:23 AM
TomCopeland's Avatar
TomCopeland TomCopeland is offline
Business Author/Trainer
 
Join Date: Jun 2010
Location: St. Paul, Minnesota
Posts: 3,032
Default Depreciation and MM

Depreciation expenses are put on Form 4562 and then added together and entered on Schedule C.

I wouldn't try to put them on Schedule C on Minute Menu (even if you did the depreciation calculation on your own) because it might confuse the tax preparer.

Just print out the depreciation report on Minute Menu and give this to your tax preparer.
__________________
http://www.tomcopelandblog.com
Reply With Quote
  #14  
Old 01-15-2011, 12:54 PM
My4SunshineGirlsNY's Avatar
My4SunshineGirlsNY My4SunshineGirlsNY is offline
Advanced Daycare.com Member
 
Join Date: Oct 2009
Location: New York
Posts: 575
Default

Quote:
Originally Posted by TomCopeland View Post
Depreciation expenses are put on Form 4562 and then added together and entered on Schedule C.

I wouldn't try to put them on Schedule C on Minute Menu (even if you did the depreciation calculation on your own) because it might confuse the tax preparer.

Just print out the depreciation report on Minute Menu and give this to your tax preparer.

Ok, thank you so much for clarifying that, the depreciation was really confusing me but it is looking so much clearer now. Thanks again!
Reply With Quote
Reply

Tags
income

Thread Tools
Display Modes

Posting Rules
You may post new threads
You may post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off

Forum Jump

Similar Threads
Thread Thread Starter Forum Replies Last Post
Home-Based Employees and Profit? SaborStyle Daycare and Taxes 0 08-06-2012 06:11 AM
Business Checking Account? Kim Daycare and Taxes 3 06-10-2012 05:03 PM
For Profit Corporation / Non Profit JohnC Daycare Center and Family Home Forum 3 05-02-2011 12:48 PM
Technically Opened In June But Been Preparing Since January... E Daycare Daycare and Taxes 9 01-20-2011 07:12 AM
Taxes: Time/Space vs % of Business Use legomom922 Daycare and Taxes 4 09-21-2010 04:22 AM


All times are GMT -7. The time now is 04:19 PM.



Daycare.com         Find A Daycare         List Your Daycare         Toys & Products                 About Us

Daycare.com
Please read our Disclaimer before continuing.

Topics pertain mainly to the following States:

Alabama Alaska Arizona Arkansas California Colorado Connecticut Delaware District of Columbia Florida Georgia Hawaii Idaho Illinois Indiana Iowa Kansas Kentucky Louisiana Maine Maryland Massachusetts Michigan Minnesota Mississippi Missouri Montana Nebraska Nevada New Hampshire New Jersey New Mexico New York North Carolina North Dakota Ohio Oklahoma Oregon Pennsylvania Rhode Island South Carolina South Dakota Tennessee Texas Utah Vermont Virginia Washington West Virginia Wisconsin Wyoming