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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 01-19-2013, 07:23 PM
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Nickel Nickel is offline
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Default Interest/Utility and Garage Sale Item Question

Okay, I figured out my Time space percentage to be about 20%. That's from starting in July and having 6% dedicated space.

So my question is with the interest and utilities, do I take 20% of my interest and utilities for the year, or just from the months I was actually opened? And if it's only the months I was open, how do I determine what I actually paid per month as part of my mortgage. My bank just sends a yearly statement. We are military that lives in off base housing. I know that makes it much more complicated...

Also, can we claim credit card interest for items that were purchased exclusively for the daycare?

I also lost some receipts from when I first opened as well as do not have receipts for items purchased to start up my daycare. Mainly outdoor toys and games that I purchased off Facebook groups, Craigslist, and at garage sales. What information do I need to claim these purchases? I've kept a log that includes the item, date, and purchase price. Is there more information I need? Is there a dollar or item limit to garage sale items?

Also, is there a lost receipt statement I can use? For instance I spent over $100 at a children's consignment sale and bought a ton of little people sets, preschool games, books, Melissa and doug sets, a pack n play, highchair, etc, all for the daycare. Can I still claim this or am I out of luck?

Thanks in advance, I had Tom's book about recordkeeping, but for the life of my I can't find it!!!
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Old 01-20-2013, 11:08 AM
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TomCopeland TomCopeland is offline
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Default Questions

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Originally Posted by Nickel View Post
Okay, I figured out my Time space percentage to be about 20%. That's from starting in July and having 6% dedicated space.

So my question is with the interest and utilities, do I take 20% of my interest and utilities for the year, or just from the months I was actually opened? And if it's only the months I was open, how do I determine what I actually paid per month as part of my mortgage. My bank just sends a yearly statement. We are military that lives in off base housing. I know that makes it much more complicated...

Also, can we claim credit card interest for items that were purchased exclusively for the daycare?

I also lost some receipts from when I first opened as well as do not have receipts for items purchased to start up my daycare. Mainly outdoor toys and games that I purchased off Facebook groups, Craigslist, and at garage sales. What information do I need to claim these purchases? I've kept a log that includes the item, date, and purchase price. Is there more information I need? Is there a dollar or item limit to garage sale items?

Also, is there a lost receipt statement I can use? For instance I spent over $100 at a children's consignment sale and bought a ton of little people sets, preschool games, books, Melissa and doug sets, a pack n play, highchair, etc, all for the daycare. Can I still claim this or am I out of luck?

Thanks in advance, I had Tom's book about recordkeeping, but for the life of my I can't find it!!!
20% sounds too low, particularly with a 100% exclusive use room. You should be dividing the number of hours you worked in your home from July - December by the total number of hours in those month (not the total number of hours in the year).

Once you redo your time-space %, multiply it by your house expenses for those months you used it for your business. If you were in business for 6 months, take half of your annual amount.

I've written about off base housing expenses in my Family Child Care Record Keeping Guide.

You can claim credit card interest for all items used in your business, 100% business and shared items.

The records you have for purchases without receipts is good. One more thing: take pictures of these items. Then you are set. You are not out of luck because you don't have a receipt. Write down what you bought, where you bought it, how much it cost, and a photo.

Join me for a webinar “2012 Tax Changes: How to Avoid Mistakes on Your Tax Return” Tuesday, February 12th at 8:30-10:00pm Eastern Time. The cost is $25 (100% tax deductible!). To register: http://events.r20.constantcontact.co...&llr=yatrx4cab
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Old 01-20-2013, 11:40 AM
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Nickel Nickel is offline
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Thank you so much! I didn't realize it was divided by the hours in the months I was open. I assumed it was the entire year! That will help me out tremendously!

I did see the military housing section of the book (I finally figured out where I stuck it!) and I was a little confused. Our housing does not cover all of our expenses. I will have to go back and read through it again and see if I can come up with the correct amounts. But if I remember correctly, I basically can only claim expenses above and beyond our housing allowance. I will go back and read it again.

I am actually trying to see if I can do my own taxes this year, using the Turbo Tax online Business Addition. I've done our taxes before, just not for home daycare. I'm also preordering your book that comes out Feb 5. Hopefully this will help out as well.

For now I am trying to gather up all the documents and get everything set so I can just plug in the numbers.

Thanks for responding, I do greatly appreciate it!!!
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