Daycare.com Forum
Daycare and Taxes>To Tom or Anyone Using MMK
legomom922 01:48 PM 10-27-2010
How does the depriciation work?
Like what does it mean in MMK when they ask for the depriciation method of 39 straight yr or other?
And what does it mean where it says convention, mid month or other?
And what does it mean where it says basis of depriciation?
I am totaly lost and dont know how to do this part...
Like what does it mean in MMK when they ask for the depriciation method of 39 straight yr or other?
And what does it mean where it says convention, mid month or other?
And what does it mean where it says basis of depriciation?
I am totaly lost and dont know how to do this part...
legomom922 10:58 AM 10-28-2010
anyone know how to do this?
MommyMuffin 11:24 AM 10-28-2010
I have the same question too.
I bought a swing set a few month back and am just now opening my daycare so I need to depreciate it I think...
I am so new to this...is there a "help desk" to call or anything for MMK
I bought a swing set a few month back and am just now opening my daycare so I need to depreciate it I think...
I am so new to this...is there a "help desk" to call or anything for MMK
Childminder 11:39 AM 10-28-2010
I had similar questions and contacted MM about them. The response I got was they do not offer any answers to tax questions and to contact my tax professional.
legomom922 02:26 PM 10-28-2010
I still say we need a Tax board on here or a MMK board on here so we have a place to go and talk about & help each other with all this tax stuff! It's soo overwhelming!
legomom922 09:49 AM 10-29-2010
Tom? help!
DCMomOf3 10:21 AM 10-29-2010
Depreciation is the value on an item which goes down every year until it reached $0, then it can come off the books . anything that is not desposable could be considered depreciable, but big things for sure. THis is for any business, and I would talk to an accountant about your questions. The answers can be very involved.
TomCopeland 08:17 PM 10-29-2010
The basics of depreciation are this. Items that cost less than $100 (rough rule of thumb) can be deducted in one year. Items that cost more than $100 should be depreciated over a number of years (with some exceptions. The categories of things that are depreciated are:
Office equipment (computers, printers, etc)- 5 years
Personal property (furniture, appliances, play equip, etc.) -7 years
Land improvement (fence, patio, driveway, deck) - 15 years
Home improvements (remodeling, new wood floor, new furnace) - 39 years
Home - 39 years
For example, if you bought a $1,000 sofa you would depreciate it over 7 years. If it was used for business and personal purposes and your time-space % was 40% then $1,000 x 40% = $400 divided by 7 years = $57 a year. You would claim a deduction of $57 a year for 7 years. I've somewhat simplified this. If you want all the details, see my annual Family Child Care Tax Workbook and Organizer.
What about Minute Menu Kids Pro? We didn't go into the details of depreciation because the rules change, the calculations are complex, and the software wasn't meant to enable providers to do their taxes with it. So, we put in the software some things you could record if you knew about depreciation (conventions, straight line, etc.) If you don't know about this, don't worry. Just keep receipts for items you bought costing more than $100. Enter the basic information in the software that you understand. If you don't understand the question, leave it blank and don't worry about it. Let your tax preparer do the calculations. If you are doing your own taxes, follow the detailed instructions in my Tax Workbook.
Now, if you really want to know about the convention rules and the straight line versus accelerated rules, let me know and I'll tell you. I enjoy explaining it but usually providers don't want to know, so I don't go into it.
BTW - I wrote a blog post on my blog about a new tax rule that gives providers a bigger tax deduction if they buy office equipment, personal property, or land improvements before the end of 2010. To see this: http://tomcopelandblog.typepad.com/t...ds-taking-car/ and look for the post "Now May Be the Time to Buy Stuff for Your Business" posted on 10/4/10.
Office equipment (computers, printers, etc)- 5 years
Personal property (furniture, appliances, play equip, etc.) -7 years
Land improvement (fence, patio, driveway, deck) - 15 years
Home improvements (remodeling, new wood floor, new furnace) - 39 years
Home - 39 years
For example, if you bought a $1,000 sofa you would depreciate it over 7 years. If it was used for business and personal purposes and your time-space % was 40% then $1,000 x 40% = $400 divided by 7 years = $57 a year. You would claim a deduction of $57 a year for 7 years. I've somewhat simplified this. If you want all the details, see my annual Family Child Care Tax Workbook and Organizer.
What about Minute Menu Kids Pro? We didn't go into the details of depreciation because the rules change, the calculations are complex, and the software wasn't meant to enable providers to do their taxes with it. So, we put in the software some things you could record if you knew about depreciation (conventions, straight line, etc.) If you don't know about this, don't worry. Just keep receipts for items you bought costing more than $100. Enter the basic information in the software that you understand. If you don't understand the question, leave it blank and don't worry about it. Let your tax preparer do the calculations. If you are doing your own taxes, follow the detailed instructions in my Tax Workbook.
Now, if you really want to know about the convention rules and the straight line versus accelerated rules, let me know and I'll tell you. I enjoy explaining it but usually providers don't want to know, so I don't go into it.
BTW - I wrote a blog post on my blog about a new tax rule that gives providers a bigger tax deduction if they buy office equipment, personal property, or land improvements before the end of 2010. To see this: http://tomcopelandblog.typepad.com/t...ds-taking-car/ and look for the post "Now May Be the Time to Buy Stuff for Your Business" posted on 10/4/10.
legomom922 01:50 PM 10-31-2010
Ok, so I know understand that for my home in MMK expenses, I should choose the 39 yr option. I get that. What about where it asks "convention" mid month or other? What would I put there? Or are you suggesting that if I dont understand the depreciation, not to fill this section out at all?
Now where it asks for the basis of depreciation, what normally would go there?
Where it asks for value of land, do they mean the actual value of the land your home is on? or only if you also own land?
I am assuming where it asks for home description, I just need to put family home?
I dont mind filling out this info, as long as I understand how I am to do it and if I am filling it out correctly.
I will still have to get a accountant to do my taxes for this yr, so I learn
Now where it asks for the basis of depreciation, what normally would go there?
Where it asks for value of land, do they mean the actual value of the land your home is on? or only if you also own land?
I am assuming where it asks for home description, I just need to put family home?
I dont mind filling out this info, as long as I understand how I am to do it and if I am filling it out correctly.
I will still have to get a accountant to do my taxes for this yr, so I learn
legomom922 01:51 PM 10-31-2010
Ok, so I know understand that for my home in MMK expenses, I should choose the 39 yr option. I get that. What about where it asks "convention" mid month or other? What would I put there? Or are you suggesting that if I dont understand the depreciation, not to fill this section out at all?
Now where it asks for the basis of depreciation, what normally would go there?
Where it asks for value of land, do they mean the actual value of the land your home is on? or only if you also own land?
I am assuming where it asks for home description, I just need to put family home?
I dont mind filling out this info, as long as I understand how I am to do it and if I am filling it out correctly.
I will still have to get a accountant to do my taxes for this yr, so I learn.
Thanks so much for the help!!
Now where it asks for the basis of depreciation, what normally would go there?
Where it asks for value of land, do they mean the actual value of the land your home is on? or only if you also own land?
I am assuming where it asks for home description, I just need to put family home?
I dont mind filling out this info, as long as I understand how I am to do it and if I am filling it out correctly.
I will still have to get a accountant to do my taxes for this yr, so I learn.
Thanks so much for the help!!
TomCopeland 06:28 PM 11-03-2010
Just ignore the "convention" and the basis for depreciation. Also ignore the land value. Just put down what you bought and how much it cost. You don't even need to know over how many years to depreciate something. Your tax preparer will deal with this later.
care-care 12:18 PM 02-17-2011
But Tom it is asking for depresation and convention it wont let me go further with out it.. what do we put.?? Im logging in office desk and computer and file cabniet etc.. i selected depreciate over 5 yrs and now it wants convention. and i also clicked time space percent.. help
TomCopeland 09:27 AM 02-18-2011
Sorry, I forgot that point. Put down "half year" for the convention for everything except a home improvement and your home. For those two, put "mid-month" convention.
Join me for my webinar February 28th "How to Reduce Your Taxes for 2010 and 2011". I guarantee that you will save more money on your taxes than the cost of the webinar ($25). For more info: https://www.daycare.com/news/taxes/t...d-webinar.html
Join me for my webinar February 28th "How to Reduce Your Taxes for 2010 and 2011". I guarantee that you will save more money on your taxes than the cost of the webinar ($25). For more info: https://www.daycare.com/news/taxes/t...d-webinar.html