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Old 04-07-2015, 12:28 PM
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Abigail Abigail is offline
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Default Depreciation, Which Category And How Many Years?

1. We had a pest control service come out to take care of the lawn so the kids could play without the inconvenience of weeds. It was $228 for the season to keep it treated. Is this a one time expense that I could claim 100% daycare or does it need to be a shared expense for fees? I know it's right above $200 rule of thumb limit, but it's going to be an annual fee we pay so I wasn't sure if I need to depreciate it or just write it off under fees whether it's exclusively daycare or a shared expense.

2. We had our livingroom, halls, and steps carpeted. Would that be a shared personal property over 7 years?

3. We had an electrical outlet installed in the garage because we bought a second full size deep freeze to use exclusively for daycare meals. It was $315 to have an electrician install the outlet. How do I depreciate it?

4. We have our basement all daycare, even the entrance is separate. The daycare kitchen flooring was concrete until 2014 when we installed laminate flooring. Is this exclusive shared property over 7 years since it's installed in a daycare only used room?

5. Completing our daycare and my husbands w2 for last year was $358. Is this a shared fees expense for write-off or since it's over the rule of thumb limit does it need to be depreciated? It would make sense to have it be a fees and write it off in the same year because it's an annual expense.
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Old 04-07-2015, 02:21 PM
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TomCopeland TomCopeland is offline
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Default Depreciation

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Originally Posted by Abigail View Post
1. We had a pest control service come out to take care of the lawn so the kids could play without the inconvenience of weeds. It was $228 for the season to keep it treated. Is this a one time expense that I could claim 100% daycare or does it need to be a shared expense for fees? I know it's right above $200 rule of thumb limit, but it's going to be an annual fee we pay so I wasn't sure if I need to depreciate it or just write it off under fees whether it's exclusively daycare or a shared expense.

2. We had our livingroom, halls, and steps carpeted. Would that be a shared personal property over 7 years?

3. We had an electrical outlet installed in the garage because we bought a second full size deep freeze to use exclusively for daycare meals. It was $315 to have an electrician install the outlet. How do I depreciate it?

4. We have our basement all daycare, even the entrance is separate. The daycare kitchen flooring was concrete until 2014 when we installed laminate flooring. Is this exclusive shared property over 7 years since it's installed in a daycare only used room?

5. Completing our daycare and my husbands w2 for last year was $358. Is this a shared fees expense for write-off or since it's over the rule of thumb limit does it need to be depreciated? It would make sense to have it be a fees and write it off in the same year because it's an annual expense.
Pest control - Multiply by time-space % and deduct in one year as maintenance on Form 8829. It's now a $500 rule. You can deduct in one year anything costing less than $500.

Carpet - Yes, depreciate over 7 years, using time-space %. You can also use the 50% bonus depreciation rule on this.

Electrical outlet - Multiply by time-space % and deduct in one year as a repair on Form 8829.

Basement flooring - Depreciate 100% of the cost over 7 years. Use the 50% bonus depreciation rule.

Not sure what the$358 is for. Clarify.
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Old 04-13-2015, 09:53 AM
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Abigail Abigail is offline
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The $358 was the total our tax person charged for our taxes, which was all my daycare and my husbands one W2.


Can't the electrical outlet be 100% because it was installed for a second freezer used only for daycare? If we didn't do daycare we wouldn't need a separate deep freeze for all the meals I cook and freeze.
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Old 04-13-2015, 10:36 AM
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Default deductions

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Originally Posted by Abigail View Post
The $358 was the total our tax person charged for our taxes, which was all my daycare and my husbands one W2.


Can't the electrical outlet be 100% because it was installed for a second freezer used only for daycare? If we didn't do daycare we wouldn't need a separate deep freeze for all the meals I cook and freeze.
Yes, claim 100% of the electrical outlet.
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Old 04-14-2015, 12:25 PM
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Abigail Abigail is offline
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50% Bonus Depreciation:

Last year for 2013 I never used this because I knew I would earn more income in 2014. Now this year we started my taxes this morning and they're "on hold" so she can finish entering my depreciation items today sometime. Is it really beneficial to take the 50% bonus depreciation? Either way it still will depreciate something over the next seven years for those items.....If we can't use it after the seven years do we write off the remainder of the depreciation in that last year or do we lose it if it doesn't last all seven years?

Replacing 1 year old carpet:

So we put carpet in one of the bedrooms in 2013 so that was a shared personal property expense for $829 and we had to replace the room's carpeting a year later (which would be for 2015 taxes since it was done in Feb. 2015) because our cat was peeing on the carpet so we had to tear the whole carpet and part of the padding out. So does that mean that next year when we do taxes and have that same room down for depreciation AGAIN for almost the same amount of money that we claim the rest of the original depreciation next year so it didn't last 7 years?


Closing Your Business:

If we were to close our daycare, do we get to depreciate the rest of the items that were not depreciated or just "lose it", is that why people always want to claim the bonus depreciation so they don't "lose it"?
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Old 04-15-2015, 09:58 AM
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TomCopeland TomCopeland is offline
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Default depreciation

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Originally Posted by Abigail View Post
50% Bonus Depreciation:

Last year for 2013 I never used this because I knew I would earn more income in 2014. Now this year we started my taxes this morning and they're "on hold" so she can finish entering my depreciation items today sometime. Is it really beneficial to take the 50% bonus depreciation? Either way it still will depreciate something over the next seven years for those items.....If we can't use it after the seven years do we write off the remainder of the depreciation in that last year or do we lose it if it doesn't last all seven years?

Replacing 1 year old carpet:

So we put carpet in one of the bedrooms in 2013 so that was a shared personal property expense for $829 and we had to replace the room's carpeting a year later (which would be for 2015 taxes since it was done in Feb. 2015) because our cat was peeing on the carpet so we had to tear the whole carpet and part of the padding out. So does that mean that next year when we do taxes and have that same room down for depreciation AGAIN for almost the same amount of money that we claim the rest of the original depreciation next year so it didn't last 7 years?


Closing Your Business:

If we were to close our daycare, do we get to depreciate the rest of the items that were not depreciated or just "lose it", is that why people always want to claim the bonus depreciation so they don't "lose it"?
It's always beneficial to take the 50% bonus depreciation. If you stop using the item before the end of 7 years, you don't get the rest of the depreciation.

Carpet - IN 2015 claim the remaining business portion of depreciation on the old carpet. Then start depreciating the new carpet over 7 years.

If you close down, you don't get any remaining depreciation. Using the 50% bonus rule means you will lose less in depreciation because you were able to claim much of it in the first year.
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