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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 12-29-2013, 09:24 PM
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Lightbulb Home Expense Rollover? (Tom.. Insights Please)

Can this be explained to me a little better? I am not sure that I understand it.

I was informed that as an in home daycare, if my deductions,expenses, depreciations etc... exceed my years income, then the HOME portion of expenses will rollover into next year... (that might be paraphrased slightly)

I only made 3300.00 this year from my daycare, my direct 100% expenses combined with my start up expenses (legal contracts, inventory deduction, crafts supplies, standard meal deduction, items bought for specifically for daycare, gift deductions etc etc.) exceed the 3300$ that I made. We had anticipated this would happen our first year but that doesn't even get into my T/s% deductions, such as mortgage interest, vehicle expenses, Utilities etc..

I had a pt job outside the home this year for 10 months as well and I only made about 1500$ at that, but I did have all the normal taxes/ss/etc withheld,as well as an extra 10$ per pay check and claimed ZERO.

I know I will have Self employment taxes to pay as I have not paid anything in this year for the daycare (i wasnt sure when or how.. but have since figured that out)

So what happens when All my deductions and depreciations etc exceed my income? Do I lose any of the deductions?

I file jointly with my husband who has foreign income (Australia) as well as US income, is tax exempt in our home state (MO) where I am not, and he pays taxes in LA where I do not. Complicated much?
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Old 12-30-2013, 10:47 AM
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Default Claiming a loss

You can't claim house expenses (Form 8829) if your business shows a loss. Any house expenses that you can't claim in 2013 get rolled over to 2014. These will show up on line 42 of Form 8829. You will be able to show these expenses on your 2014 Form 8829.

All other expenses on Schedule C you can claim, even if they create a loss. Any business loss will reduce your husband's gross income. If you have a loss on Schedule C (or make a profit of less than $400) you won't owe any Social Security/Medicare taxes.
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Old 12-30-2013, 04:15 PM
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Default

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Originally Posted by TomCopeland View Post
You can't claim house expenses (Form 8829) if your business shows a loss. Any house expenses that you can't claim in 2013 get rolled over to 2014. These will show up on line 42 of Form 8829. You will be able to show these expenses on your 2014 Form 8829.

All other expenses on Schedule C you can claim, even if they create a loss. Any business loss will reduce your husband's gross income. If you have a loss on Schedule C (or make a profit of less than $400) you won't owe any Social Security/Medicare taxes.
ok, so if my business shows a loss, which Im positive it will, my 2013 home expenses will roll over to 2014, will i still be able to claim additional house expenses in 2014?
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Old 12-31-2013, 07:59 AM
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Default house expenses

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ok, so if my business shows a loss, which Im positive it will, my 2013 home expenses will roll over to 2014, will i still be able to claim additional house expenses in 2014?
House expenses are: property tax, mortgage interest, house insurance, house repairs, utilities, and house depreciation. If you can't claim them in 2013, you roll them over to 2014. As long as you can show a profit in 2014, you can claim these expenses.

Example: You have $10,000 of roll over house expenses for 2014. Your income in 2014 is $30,000. Your Schedule C expenses (without counting any house expenses) are $15,000. Your 2014 house expenses are $12,000. You can claim all of your 2014 house expenses and $3,000 of your 2013 house expenses and roll over the other $7,000 to 2015.
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Old 12-31-2013, 08:09 AM
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Originally Posted by TomCopeland View Post
House expenses are: property tax, mortgage interest, house insurance, house repairs, utilities, and house depreciation. If you can't claim them in 2013, you roll them over to 2014. As long as you can show a profit in 2014, you can claim these expenses.

Example: You have $10,000 of roll over house expenses for 2014. Your income in 2014 is $30,000. Your Schedule C expenses (without counting any house expenses) are $15,000. Your 2014 house expenses are $12,000. You can claim all of your 2014 house expenses and $3,000 of your 2013 house expenses and roll over the other $7,000 to 2015.
excellent! So I don't "lose" anything due to the inability to use it on a given year! Now, is that just MY income, or will my husbands be a factor in that?
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Old 12-31-2013, 08:11 AM
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Originally Posted by TomCopeland View Post
House expenses are: property tax, mortgage interest, house insurance, house repairs, utilities, and house depreciation. If you can't claim them in 2013, you roll them over to 2014. As long as you can show a profit in 2014, you can claim these expenses.

Example: You have $10,000 of roll over house expenses for 2014. Your income in 2014 is $30,000. Your Schedule C expenses (without counting any house expenses) are $15,000. Your 2014 house expenses are $12,000. You can claim all of your 2014 house expenses and $3,000 of your 2013 house expenses and roll over the other $7,000 to 2015.

House depreciation": My accountant told me something about if I claim depreciation on the house, then it MAY be subject to having to pay income taxes on it in the future If we sell it and it sells over a certain amount because to depreciate the home makes it a business dwelling or something like that.

any info on that?
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Old 12-31-2013, 11:30 AM
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excellent! So I don't "lose" anything due to the inability to use it on a given year! Now, is that just MY income, or will my husbands be a factor in that?
Yes, you don't "lose" anything, you roll it over to the next year. This only applies to your business income. It doesn't affect your husband's income.
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Old 12-31-2013, 11:33 AM
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Default home depreciation

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Originally Posted by Punkin.Butts View Post
House depreciation": My accountant told me something about if I claim depreciation on the house, then it MAY be subject to having to pay income taxes on it in the future If we sell it and it sells over a certain amount because to depreciate the home makes it a business dwelling or something like that.

any info on that?
When you claim home depreciation you will owe taxes when you sell your home on the total home depreciation you claimed while you were in business. It doesn't matter what you sell your home for. If you don't claim this depreciation, you will still have to pay the same taxes because the IRS rules say that if you are entitled to claim depreciation you will be treated as if you did claim it, even if you didn't. Here's an article that explains this:
http://www.tomcopelandblog.com/2013/...your-home.html
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