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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 01-21-2019, 08:25 PM
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Default Good Reading in Tom Copelands Book

OK Tom, I am finalizing my categories for record keeping after going through your book again. This is what I have in a nutshell. I went off your lists and picked out the items in the categories that I usually use:

Toys and craft materials

Gifts

Office Expense (books, dues, computer software, paper supplies, desk supplies, training, internet)

Repairs and Maintenance (carpet cleaning, flashlight and batteries, lawn maint., pest control, repair of applicances)

Kitchen supplies: (kitchen utensils, pans, cups, dishes, storage containers, tinfoil, saran wrap, garbage bags, cans, napkins, paper plates, cups, dish towels, cookbooks, kitchen appliances, placemats, plastic bags,storage containers)

Utilities: gas, electric and water

Household supplies: (indoor/outdoor thermometer, fire alarm, fire extinguisher, fireplace screen, first aide, flower boxes and flowers, garden hose, tools, gas for lawn mower, appliances, safety latches, blankets, shelves, boosters, clothes hangers, hampers, coat hooks, cribs, extension cords, window shades)

Cleaning supplies (waste bakets, wash clothes, kleenex, garbage can/liners, hand towels, vacuum, laundry basket, paper towels, toilet paper, plunger, cleaning brush)

Activity Expenses (cakes, special foods for treats such as popcorn, pizza)

Daycare Insurance


I know in one part of the book it did say that you didn't need to worry about separating some expenses, but then I thought I read that if you throw everything into one category it kinda sends out a red flag. How do these look? Am I missing anything?
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Old 01-22-2019, 04:51 AM
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Wouldn't cribs be considered a dc expense, unless your own child uses it too? Household costs use the T/S formula so you'd be missing out on the full cost being deducted. Same with boosters and blankets used just for dc.
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Old 01-22-2019, 05:32 AM
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Wouldn't cribs be considered a dc expense, unless your own child uses it too? Household costs use the T/S formula so you'd be missing out on the full cost being deducted. Same with boosters and blankets used just for dc.
Good points. I should note, I have an 18 and 20 year old, so the daycare things, my kids do not use at all.
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Old 01-22-2019, 05:34 AM
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Wouldn't cribs be considered a dc expense, unless your own child uses it too? Household costs use the T/S formula so you'd be missing out on the full cost being deducted. Same with boosters and blankets used just for dc.
So maybe add another category that is daycare expense for things from all of the other categories that are strictly 100% daycare related? Even paper products, if it's something I use strictly for daycare it should be 100%, not t/s?

So take cribs, boosters, first aid kit strictly for dc and put it under a "daycare expense 100% " category
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Old 01-22-2019, 09:52 AM
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Default expense categories

Quote:
Originally Posted by lovemykidstoo View Post
OK Tom, I am finalizing my categories for record keeping after going through your book again. This is what I have in a nutshell. I went off your lists and picked out the items in the categories that I usually use:

Toys and craft materials

Gifts

Office Expense (books, dues, computer software, paper supplies, desk supplies, training, internet)

Repairs and Maintenance (carpet cleaning, flashlight and batteries, lawn maint., pest control, repair of applicances)

Kitchen supplies: (kitchen utensils, pans, cups, dishes, storage containers, tinfoil, saran wrap, garbage bags, cans, napkins, paper plates, cups, dish towels, cookbooks, kitchen appliances, placemats, plastic bags,storage containers)

Utilities: gas, electric and water

Household supplies: (indoor/outdoor thermometer, fire alarm, fire extinguisher, fireplace screen, first aide, flower boxes and flowers, garden hose, tools, gas for lawn mower, appliances, safety latches, blankets, shelves, boosters, clothes hangers, hampers, coat hooks, cribs, extension cords, window shades)

Cleaning supplies (waste bakets, wash clothes, kleenex, garbage can/liners, hand towels, vacuum, laundry basket, paper towels, toilet paper, plunger, cleaning brush)

Activity Expenses (cakes, special foods for treats such as popcorn, pizza)

Daycare Insurance


I know in one part of the book it did say that you didn't need to worry about separating some expenses, but then I thought I read that if you throw everything into one category it kinda sends out a red flag. How do these look? Am I missing anything?
Your expense categories are fine. As others have stated, you need to identify which items are 100% business and which are shared between your business and your family. You don't need separate expense categories for this.
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Old 01-22-2019, 06:14 PM
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Your expense categories are fine. As others have stated, you need to identify which items are 100% business and which are shared between your business and your family. You don't need separate expense categories for this.
So if I go by what I have above, the categories that would be t/s% would be: ulitities, repairs and maintenance, kitchen supplies, household supplies, cleaning supplies.

My 100% would be: Toys and craft materials, gifts, daycare insurance, activity expenses.

I'm not sure about office expenses because some things are 100% for daycare and some are used by everyone in my household.

So should I only have 100% Business Expense, T/S Business Expense and that's it? I thought that threw red flags to pile things into too few of categories?
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Old 01-23-2019, 10:39 AM
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Quote:
Originally Posted by lovemykidstoo View Post
So if I go by what I have above, the categories that would be t/s% would be: ulitities, repairs and maintenance, kitchen supplies, household supplies, cleaning supplies.

My 100% would be: Toys and craft materials, gifts, daycare insurance, activity expenses.

I'm not sure about office expenses because some things are 100% for daycare and some are used by everyone in my household.

So should I only have 100% Business Expense, T/S Business Expense and that's it? I thought that threw red flags to pile things into too few of categories?
I'll throw this out there in case this is helpful. I don't lump expenses into T/S or 100% categories; instead, as I review each receipt, I mark the receipt and do that math. Sometimes a book of stamps I buy is JUST for daycare because I'm sending out some type of mailer (100% business) and sometimes that book is for my family, as well (T/S). Sometimes I buy a baby item that I use during non-daycare hours (T/S), and sometimes it exclusively lives in my daycare (100%).

I do break out my categories quite a bit. Although I may not need to, it helps me compare what I spent from year to year. My CPA gives me a custom packet with my year-end totals fro them previous year so I can compare this year's expenses.
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Old 01-23-2019, 10:39 AM
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Default expense categories

Quote:
Originally Posted by lovemykidstoo View Post
So if I go by what I have above, the categories that would be t/s% would be: ulitities, repairs and maintenance, kitchen supplies, household supplies, cleaning supplies.

My 100% would be: Toys and craft materials, gifts, daycare insurance, activity expenses.

I'm not sure about office expenses because some things are 100% for daycare and some are used by everyone in my household.

So should I only have 100% Business Expense, T/S Business Expense and that's it? I thought that threw red flags to pile things into too few of categories?
As long as any one expense category is not, say, 10 times more than the next lowest category, don't worry about this. You can list expenses by categories of 100% business and time-space%. Most providers, however list expense categories by the items (toys, supplies, utilities, etc.) and calculate on a separate paper how much of each category was 100% and how much was shared and list the total on the tax return.
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Old 02-10-2019, 12:58 PM
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Originally Posted by LittleScholars View Post
I'll throw this out there in case this is helpful. I don't lump expenses into T/S or 100% categories; instead, as I review each receipt, I mark the receipt and do that math. Sometimes a book of stamps I buy is JUST for daycare because I'm sending out some type of mailer (100% business) and sometimes that book is for my family, as well (T/S). Sometimes I buy a baby item that I use during non-daycare hours (T/S), and sometimes it exclusively lives in my daycare (100%).

I do break out my categories quite a bit. Although I may not need to, it helps me compare what I spent from year to year. My CPA gives me a custom packet with my year-end totals fro them previous year so I can compare this year's expenses.
Thank you. The thing about marking on the receipt if it's t/s, is you really won't know that percentage until the end of the year right?
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Old 02-10-2019, 12:59 PM
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Tom is cable and netflix and internet all t/s?
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Old 02-11-2019, 07:04 AM
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Originally Posted by lovemykidstoo View Post
Tom is cable and netflix and internet all t/s?
As long as you are using them in your business use your time-space%.
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