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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 02-07-2016, 07:44 AM
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LittleScholars LittleScholars is offline
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Default Tom- Inventory Keeper Question

I opened my home daycare in November 2015, so this is the first time I'm filing taxes as a provider. I purchased all of Tom's books, including the Inventory Keeper. I completed it as directed, but I'm a bit confused about how to find the total I am eligible to depreciate this year. My specific questions are:
-Before totaling fair market costs for the summary page, should I divide that cost by the number of years I must depreciate it?
-What if an item is already older than the amount of years it must be depreciated. For example, I have a great Mac Book that I valued very low because of the age, but it works great and I use it every day for business. If I valued it at $100, would I divide that fair market value by 5 years?
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Old 02-08-2016, 07:02 AM
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Default depreciation

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Originally Posted by LittleScholars View Post
I opened my home daycare in November 2015, so this is the first time I'm filing taxes as a provider. I purchased all of Tom's books, including the Inventory Keeper. I completed it as directed, but I'm a bit confused about how to find the total I am eligible to depreciate this year. My specific questions are:
-Before totaling fair market costs for the summary page, should I divide that cost by the number of years I must depreciate it?
-What if an item is already older than the amount of years it must be depreciated. For example, I have a great Mac Book that I valued very low because of the age, but it works great and I use it every day for business. If I valued it at $100, would I divide that fair market value by 5 years?
All of the items in the inventory keeper can be depreciated over 7 years. Add up the fair market value of all of your items and treat them as one item for purposes of depreciation. That is, then multiply the value by your time-space % and depreciate over 7 years. The clock starts to run on depreciation in the year you first use it for your business. So, 2015 is year one for all items you owned before your business began, regardless of how old individual items were as of November.
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Old 02-08-2016, 10:32 AM
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LittleScholars LittleScholars is offline
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Thank you!! This is so, so helpful!
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