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Old 05-02-2015, 01:34 AM
christi's Avatar
christi christi is offline Member
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Question Home Improvement Expense - Tax Prep Questions

I've been operating a registered in-home daycare since June 2014, & this year, it's been my priority to upgrade our home (indoor/outdoor) to encourage the children's playful/creative/active nature, before getting really busy with being licensed for 10 enrollments in the coming year while working on my CDA credential. I currently have 6 full-time kids, and they are having a blast with our playground. It is worth the work & money spent, however, it will really be nice if we could claim a big percentage of it if not all as "business expense".

We have completed the following home improvement projects simply because we operate an in-home daycare, otherwise, we wouldn't even have thought of building (or should i say re-doing the whole backyard (kids playground) & the rest of the projects. Another difficult aspect to determine is because we did all the labor ourselves, & only spent for materials. I really would like help from anyone who is knowledgeable in regards to the depreciation type & business 100%/time-space, other categories on the IRS chart, & if the projects are qualified to be claimed as business expense in the first place. I remember the IRS said "common & necessary to the trade" or something in between those lines. I only tallied material expenses because we manually installed & built everything ourselves in strict consideration to State Licensing play equipment/area specifications.

1. Window blinds (for kids privacy from busy neighborhood but lots of natural sunlight) = $80

2. AC & trampoline enclosure (permanent fix to temporary cover)
= $345.21 (materials only: pressure-treated wood, screws, stain)

3. Playground set & Infant Swings (little trike buckled swings)
= $284.88

4. Swingset surfacing (required by Licensing Min. Standards)
= $235.84

5. Infant/Living Room Bench & table (separate infant room toy organizers that they can reach from toddlers' playroom)
= $384.69 (materials only: wood, screws, stain, sealant, wood glue)

6. Backyard fencing (needed replacement to old hazardous fencing now exposed because of everything is redone to maximize playground area while meeting Licensing Min. Standard allowed perimeters, and also falling apart of some fencing due to neighbor's German Shep dog head-butting our side of the fence coz of excitement from hearing kids play on our side)
= $1,098.90 (materials only: pressure-treated posts & pickets, screws, paint, hole-digger thing)

7. sun shade for Playground set area (needed shade from extreme sunshine & no shade)

8. Replacement Ceiling Fan & bulbs (needed for & very old ceiling fan/light & unstable right over table for kids' meal/snack area)

9. Tools/hardware for all projects (needed to get projects done since we personally built/installed everything ourselves)
=$250.02 (sander, sanding paper, leveler, spray paint, brushes, screws, drill replacement batteries, etc.)

10. Deck (determined its need for infants outdoor large motor skills play area separated from walking/running toddlers without having to keep them on strollers or spreading small sheets on non-existent grass area for them to sit still on)
=$1,380 (materials only: pressure-treated posts & decking wood, screws, stain)

11. kids bike ramp, kids outdoor bench, sandbox beach umbrella, trike track & bridge around sandbox (pressure-treated wood, screws, etc.)

I KNOW THE EXPENSES BELOW MAY OBVIOUSLY SOUND LIKE THEY ARE UNNECESSARY "BUSINESS" EXPENSES, BUT I WANT TO GIVE THE KIDS THE BEST EXPERIENCE @ my DAYCARE to keep interested family prospects, a long waiting list of suitable families, & ultimately part of planning to be the best daycare operation we can be in our own way (I WOULDN'T GET THESE MYSELF IF I WASN'T DOING DAYCARE), but I do understand that these can be over the top. I just want to ask anyway if they can be qualified as somewhat business deductible, I won't insist they are it would be pointless...

12. Live plants, stepables, perennials, succullents, etc. (we determined its need for a natural & green outdoor environment for the young explorers & numerous opportunities of learning through visual & actual daily experiences)

13. garden planters, flower beds & materials (mulch, potting mix, wood for planters, edgers, mulch, etc.)

14. aquarium, live fish, & decor (children love pets, but we hate walking pets like dogs & cats, so we have quite a collection of tropical species and added 2 more fishtanks for the kiddos to feed, observe, converse about, imagine with, calm them down for naps, ice-breaker for uncooperative kids & all those fun works wonders i tell you!)

I'D LIKE TO ADD HOME IMPROVEMENT PROJECTS IN THE FRONT YARD NEXT YEAR, BUT BEFORE I PLAN FOR IT, I'D LIKE TO KNOW IF IT'S EVEN FULLY/PARTIALLY DEDUCTIBLE, AND IF IT IS, WHICH TYPE OF DEPRECIATION SHOULD WE USE (I'm just collecting actual experiences & examples if some daycares here on the forum have already done this instead of relying completely on our CPA during tax season... she tends to generalize alot when some expenses are unfamiliar to her).

15. front driveway for faster & safer drop-offs & pick-ups (someone always gets boxed in when multiple parents arrive simultaneously, very busy street & increasing difficulty of backing out while other parents are waiting to park to pick/drop-off... we have a 15-passenger van & 4 cars parked in our own parking area, & drop-offs are becoming a hassle because of the weird space)

16. completely private privacy fencing for front yard (we'd like to convert part of front yard for another separate activity area for the kids)

17. wooden tree house in the remaining free space of backyard

(all projects were inspired by addiction!)

I would really appreciate advice on all this. I am definitely planning to tackle the above remaining projects as early as January, but I'd like to be sure before I spend for it. Some may need permits or verification for residential city zoning & a residential home must not look like a business from the outside, since its secondary use of home as business is only "accidental", but I'm sure we can still make it look like a normal home. I know these projects are a bit over-the-top for an in-home daycare, but we totally love having the kids & working with families around us in our lives.. my brother and I are grown adults (work-from-home job preferences) who still live with our parents and have no families of our own, & therefore my parents are yearning for little ones running around our old little home, but perfectly located in our (pretty old neighborhood) where alot of professional parents in surrounding businesses need child care but abhor centers & look for a quality home-based loving home which we strive to be every single day. I could see ourselves doing this for a long time and converting our home to suit the children well for encouraging & creative experiences is a wonderful thing for us to work hard on, even if it means giving up our "adult space" (which we never really enjoyed as much as we enjoyed having kids around even though everything is child-proofed". Without the kids around every week, we'd be bored to death! We have fostered 4 siblings for 3 years from 3 different batches and we realized that we were called to invest in children's lives & their family as a family. Everyday is just full of laughter & surprises, but challenges are always there to overcome and become a collection of memories & experiences that bring instant laughter to our conversations. Most importantly, there is no greater joy than being able to help a family in need or struggling because of work or emergencies, and the children have nowhere to... when you see or hear the relief & sincere gratitude from finding a loving home to be there for the emergencies of parents panicking from the stress, and the kids don't even know it because they had so much fun, it just makes the long & physically draining day worth it, & the bonus is you get paid for even just one day extra
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Old 05-02-2015, 07:22 AM
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spedmommy4 spedmommy4 is offline Member
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Location: Northern Oregon
Posts: 933

Tom Copeland has a blog, that covers these topics. But, ultimately, the best person to advise you is going to be a Certified Public Account that is familiar with your business.
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Old 05-02-2015, 10:42 AM
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christi christi is offline Member
Join Date: Mar 2015
Posts: 3

Originally Posted by spedmommy4 View Post
Tom Copeland has a blog, that covers these topics. But, ultimately, the best person to advise you is going to be a Certified Public Account that is familiar with your business.
I have talked to my CPA about all of it, but she wants to wait to look over it when i file my taxes in January. I could wait, but I'm curious and I'm in the middle of planning things business-wise and I kinda need answers asap so I could move forward with planning & re-organizing my finances to make these improvements possible.
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deductible, home improvement depreciation, tax advice

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