Written Records & Depreciation

[legomom922]

I'm just throwing questions out there as I am working on stuff..

In Toms book it says we must keep written records, photos etc of stuff we are depreciating if we are depreciating more than 3 items. I do not have a list, nor do I have a "back up" for every item. I thought that entering stuff into MMK becomes my record. Am I wrong about this? Am I doing this backwards? Am I suppose to make a list, gather all my reciepts, photos for the stuff on the list, THEN enter it into MMK?

[TomCopeland]

You don't have to create a list of items you are depreciating before entering them into MM. When you enter them into MM you are creating a list. Print out this list from MM each year and save it with your tax records. Save receipts if you have them, if not take pictures.

My daughter started daycare in November 2009 with one child in her care. For the 2009 tax filing she didn't claim any expenses, depreciation, etc as didn't make that much money at it and didn't want the bother of it all. Now filing her 2010 taxes, she wants to claim items as utilities, insurance, etc. Does she need to go back and do start up expenses (inventory) depreciation, or can she just start with this years numbers? She is not licensed and is considered exempt.

[TomCopeland]

2010 is her second year in business so she's in her second year of depreciation, even though she didn't claim depreciation in her first year.

Thank you. Now after further looking into this, I noticed that she claimed no expenses for 2009 at all, just the income, no home office etc. It wasn't much (like around $600). It was filed as self-employment income. So now the question is, could she just put that 1/1/10 is the start of the actual business?

[TomCopeland]

Nope. Her business began in 2009. She could amend her 2009 tax return, show a loss, then carry forward the loss related to her home to 2010 and get extra deductions for 2010.

Ok, thanks that helps give me direction ! have a great day !