Daycare.com Forum
Daycare and Taxes>Crunch-Time Tax Questions- Tom
TheGoodLife 07:15 PM 04-09-2013
OK, so I'm getting things ready on paper to file and I have some questions:
1- If I bought my house in May 2012, and started the DC business in August, would I use my TS% for utilities (which is based on my work hours against the total number of hours since I started my DC), or calculate a new % for my total utilities payments (based on my work hours against the total number of hours we lived in the house). Hope that makes sense!
2- If I'm reporting a loss (since I had high start-up expenses and low income), will that possibly zero out the taxes I owe? Does that include social security, or is that something you owe regardless or profit or loss?
3- For depreciation of household items I use in my DC: I didn't keep receipts for things since I didn't have a business at the time and didn't know I'd ever need them! Anyways, I'm confused as to how to depreciate for things we've owned for years and are using now for the business. For example, we bought a sectional couch in 2009. Would I start depreciation as of August 2012 (beginning of DC), value it at fair market value, and depreciate for a total of 7 years at that FMV price?
4- I use my house phone for business and my cell for personal. Can I count my cell phone as my first line and deduct my house line as business? Can I calculate my business use % for my text messaging and minutes used or does it have to be TS%? (I use my texting, laptop, and home phone for more than 50% business use)
5- If I bought a laptop in 2012, I would figure out the business use (72%) value FIRST, then depreciate that amount over 5 years, correct? If I'm unsure if I will be in business for up to 5 or 7 years, is it better to just do a Straight-Line depreciation for all things? What would you personally recommend?
6- How is the TS% rounded (34% or 34.16 or 34.2)?
7- To depreciate my house, purchased for $X in April, I would take $X - the land value, get the TS%, and multiply that amount by 0.963% (the depreciation value for August). Then every year after this I will multiply it by 2.564? Will it ever change, like if my TS% is higher, or will I always base it off the original TS from this year?
8- If I bought a cell phone for $99, but taxes made it over $100, do I need to depreciate it?
I'll probably think of a couple more I forgot as I work tonight. Thanks in advance for all of your help, Tom.
I couldn't attend your tax webinar this year, as I was working, but I plan to set it aside next year! You rock!
1- If I bought my house in May 2012, and started the DC business in August, would I use my TS% for utilities (which is based on my work hours against the total number of hours since I started my DC), or calculate a new % for my total utilities payments (based on my work hours against the total number of hours we lived in the house). Hope that makes sense!
2- If I'm reporting a loss (since I had high start-up expenses and low income), will that possibly zero out the taxes I owe? Does that include social security, or is that something you owe regardless or profit or loss?
3- For depreciation of household items I use in my DC: I didn't keep receipts for things since I didn't have a business at the time and didn't know I'd ever need them! Anyways, I'm confused as to how to depreciate for things we've owned for years and are using now for the business. For example, we bought a sectional couch in 2009. Would I start depreciation as of August 2012 (beginning of DC), value it at fair market value, and depreciate for a total of 7 years at that FMV price?
4- I use my house phone for business and my cell for personal. Can I count my cell phone as my first line and deduct my house line as business? Can I calculate my business use % for my text messaging and minutes used or does it have to be TS%? (I use my texting, laptop, and home phone for more than 50% business use)
5- If I bought a laptop in 2012, I would figure out the business use (72%) value FIRST, then depreciate that amount over 5 years, correct? If I'm unsure if I will be in business for up to 5 or 7 years, is it better to just do a Straight-Line depreciation for all things? What would you personally recommend?
6- How is the TS% rounded (34% or 34.16 or 34.2)?
7- To depreciate my house, purchased for $X in April, I would take $X - the land value, get the TS%, and multiply that amount by 0.963% (the depreciation value for August). Then every year after this I will multiply it by 2.564? Will it ever change, like if my TS% is higher, or will I always base it off the original TS from this year?
8- If I bought a cell phone for $99, but taxes made it over $100, do I need to depreciate it?
I'll probably think of a couple more I forgot as I work tonight. Thanks in advance for all of your help, Tom.
I couldn't attend your tax webinar this year, as I was working, but I plan to set it aside next year! You rock!
TheGoodLife 07:25 PM 04-09-2013
OK, I just found my answer to #4 about claiming a phone or cell and #6 about rounding TS (Tom, you mentioned you could do both and I was using the full round (34.16%) so I'm going to keep that. 
suehelen 03:00 AM 04-10-2013
I know the answer to #2.
Self employment taxes are paid on net profit. If you have no profit, you owe no tax.
Self employment taxes are paid on net profit. If you have no profit, you owe no tax.
TheGoodLife 08:52 AM 04-10-2013
Originally Posted by suehelen:
I know the answer to #2.
Self employment taxes are paid on net profit. If you have no profit, you owe no tax.
Thanks, I was hoping that I know the answer to #2.
Self employment taxes are paid on net profit. If you have no profit, you owe no tax.
