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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 01-20-2011, 02:34 PM
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Default Oh Tommmm! Water Bill Question!

We are billed quarterly for our water bill. Oct/Nov/Dec water bill was due Jan 2011. I had 2 DCK's in those months. Now I have 1. I am assuming I cannot write off that water bill because even though it was for service in 2010, it was paid in 2011. Now I assume that also means since I am down to 1 kid vs the 3, I am not going to get the larger T/S% ......So I am shorted correct?

IF I had paid it in Dec 2010, I would have a larger water bill deduction because of having the 3 kids at the time, is that correct?

Also, I paid a water bill in Nov, but because they closed out there books on Nov 1, they sent me the ck back and said they would add it to our tax bill...So I assume I cannot write that off for 2010 either..

And, I paid a water bill in Aug that was for serv for April, May & June, and I didnt go into buisness until June, so do I just divide that bill by 3 and write off that amount??

I use so much water and now I'm afraid I can hardly write any of it off!!
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Old 01-20-2011, 03:02 PM
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It doesn't matter if you were watching one child or eight. You time space percentage is based on your hours and your space so your percentage should be the same either way no matter how many kids you are watching.

I believe, that The bill has to be claimed in the year that it was paid. So if it was for service in Oct, Nov Dec 2010 and you paid it in January 2011, it would go down as a Jan. 2011 expense.

Tom, am I correct??
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Old 01-20-2011, 05:32 PM
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Originally Posted by odskids View Post
It doesn't matter if you were watching one child or eight. You time space percentage is based on your hours and your space so your percentage should be the same either way no matter how many kids you are watching.
I would have to disagree with this because before there were 3 kids here on different days/times, and now I only have 1 PT girl who is here only 2 days a week, compared to before when I had a FT here 10 hrs a day 5 days a week & another PTimer.. So I can see where the 3 kids by themselves wouldn't make a difference, compare a FT to a PT it has to affect the t/s%. KWIM?
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Old 01-20-2011, 05:46 PM
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I read that it has to be based on the hours that you were open and at least 1 child was present..
so if your hours used to be m- w- f- 8 to 6 then as long as 1 child was present then this is what you would claim.
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Old 01-20-2011, 06:00 PM
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Default Water, water everywhere

The general rule is to count expenses in the year you paid them (or incurred the debt). So the January 2011 water bill is a 2011 expense. This means you can count the August bill as an expense because you were in business when you paid the bill.
Your t/s% is calculated based on all the hours you used your home for your business during the year.
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Old 01-20-2011, 06:09 PM
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Quote:
Originally Posted by TomCopeland View Post
The general rule is to count expenses in the year you paid them (or incurred the debt). So the January 2011 water bill is a 2011 expense. This means you can count the August bill as an expense because you were in business when you paid the bill.
Your t/s% is calculated based on all the hours you used your home for your business during the year.
Tom, The bill I got in 2010 for the months of Oct-Dec, with a due date of Jan 2011..you said count the expenses th eyr you paid them or incurred the debt. In this case, I incurred the debt in 2010, but paid in 2011. I guess I'm still confused..

Also, I can count the Aug water bill even though it included 2 months of service when I was NOT in business? (April & May)

The t/s% is exactly what I thought..it depends on hrs that children are here, not just opened...right? I cant very well count business hrs on Mon, Thurs, & Fri if no child is here..
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Old 01-20-2011, 06:10 PM
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Quote:
Originally Posted by lvt77 View Post
I read that it has to be based on the hours that you were open and at least 1 child was present..
so if your hours used to be m- w- f- 8 to 6 then as long as 1 child was present then this is what you would claim.
Child is only here Tues/Wed.
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Old 01-20-2011, 06:13 PM
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Default water, water everywhere

You didn't incur the debt until you got the bill. Paying by credit card is different. If you bought something on a credit card in December and paid for it in January it's a December expense because you incurred the debt when you signed the receipt.
Yes, count the Aug water bill.
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Old 01-20-2011, 06:32 PM
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Quote:
Originally Posted by legomom922 View Post
Child is only here Tues/Wed.
taxes, why do they have to be such a pain...lol sorry tom..
I guess its a live and learn as well as a situation of needing to properly educate ourself.

So then you can claim the those hours...

if you were open 8-5 / m-f and had 10 kids, it would still be the same as being open from 8-5 m-f for 1 kid.....
it is the hours that you were open for business that at least one child was present....
I hope I read this correctly?
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Old 01-20-2011, 06:34 PM
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Oh my...this is new to me..So Drs bills, cable bills etc, are all incurred when you get the bill not when you pay them?
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Old 01-20-2011, 06:39 PM
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Originally Posted by lvt77 View Post
if you were open 8-5 / m-f and had 10 kids, it would still be the same as being open from 8-5 m-f for 1 kid.....
it is the hours that you were open for business that at least one child was present...
It wouldnt matter that you had 10 kids..The t/s would be the same for 10 kids as it would be for 1 as long as that 1 kid was there m-f 8-5..But in my case its different because now I only have 1 kid here T & w, and no one here m, th & fri, so my t/s goes down.
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Old 01-20-2011, 06:40 PM
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yes it goes down....
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Old 01-21-2011, 09:26 AM
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[quote=legomom922;74170]Also, I paid a water bill in Nov, but because the the watre company closed out there books on Nov 1, so they sent me the ck back and said they would add it to our tax bill...So I assume I cannot write that off for 2010 either??

/QUOTE]

I think this question got lost in the shuffle.. How does this work when theyare adding the $150 to our tax bill? Would I just use t/s% for our tax bill that includes the water bill on it??
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Old 01-21-2011, 10:16 AM
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Default water and t/s%

You can count hours that your home was used for business. Thus, if one child was in your home for 10 hours or 10 children were in your home for 10 hours in both cases your home was used for business for 10 hours.

Legomom92 - Please clarify what you mean by "they are adding $150 to our tax bill." Do you mean you are being charged $150 extra for water because you are a business? If so, then deduct 100% of this surcharge, plus the t/s% of your water bill.
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Old 01-21-2011, 02:55 PM
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Quote:
Originally Posted by TomCopeland View Post
Legomom92 - Please clarify what you mean by "they are adding $150 to our tax bill." Do you mean you are being charged $150 extra for water because you are a business? If so, then deduct 100% of this surcharge, plus the t/s% of your water bill.
The bill was supposed to have paid no later than Nov 1. They got it on Nov 3 and told me that since they had just closed out their records for the yr, that they would be adding the $150 water bill to our tax bill and they sent back my ck.
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Old 01-23-2011, 12:14 PM
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Originally Posted by legomom922 View Post
The bill was supposed to have paid no later than Nov 1. They got it on Nov 3 and told me that since they had just closed out their records for the yr, that they would be adding the $150 water bill to our tax bill and they sent back my ck.
I assume I dont include this water bill as t/s because it's now been added to the tax bill for 2011? So when it comes time, do I just claim t/s on my whole tax bill even though it includes the water too?

Tom, can you help me on this one?
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Old 01-23-2011, 09:11 PM
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Default water and t/s%

Sounds like you paid them in November. They returned the check and added it your bill that you paid in 2011. If that's the case, don't include the November payment as an expense in 2010 (because it was returned before the end of 2010 - true?). Then claim the t/s% of the bill you paid in 2011 even though it include utilities used in 2010.
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Old 02-03-2011, 02:53 PM
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This was on the Canadian tax site, I pulled it off. I know Tom has already answered but here is another way to read it


As a self-employed individual, you must report business income using the accrual method of accounting.

With this method, you:

* report your income in the fiscal period you earn it, regardless of when you receive the income; and

* deduct expenses in the fiscal period you incur them, whether you paid them in that period or not. Incur usually means you either paid or will have to pay the expenses.

For more information, see Guide T4002, Business and Professional Income.
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