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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 10-14-2010, 11:48 AM
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Default How Many Hours Do You Average Out a Year?

I was wondering what kind of hours everyone averages out at the end of the year?
Total hours worked?
Total hours of prep, cook, clean, shopping, phone calls outside of daycare hours?

My tax lady said If I keep track of my prep, cook, clean, shopping, phone call, etc. hours for a couple of months that she could just take an average of time spent extra out of daycare hours itself..... I was just wondering how everyone else does it? Do you keep track down to the minute of every phone call you have outside of daycare to every minute spent on cleaning up after daycare or how do you all do this?

Honestly I never feel like daycare ends at my house! LOL from cleaning, to shopping, to preperation.... never ending job - how do you break up hours for this?
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Old 10-15-2010, 09:51 AM
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Okay, so here's a little tid-bit about how to figure this out. First off the time that you should keep track on and claim only counts if it's time that you, your spouse, another family member or an employee spends working in the home for daycare related activities during hours that children are not present. These hours can be added to your working hours to figure out what your time% is.

For example: If your hours are 6AM-6PM and your first child arrives at 6AM, your last child leaves at 6PM and there are no gaps in between and every morning from 5:30AM to 6:00AM you start preparing, arranging the room, setting up the toys for the kids whatever and every evening from 6:00PM to 6:30PM you spend time cleaning up and putting daycare things away then you can claim this time and should log these and keep track of them. Here are some examples of what you should log (when the kids are not there):

• Cleaning the rooms in your home that is used by your daycare
• Preparing food and meals for the DC kids
• Reading to find recipes for the DC (magazines, internet, books)
• Planning lesson plans
• Preparing lesson plans (getting the activities ready)
• Decorating the home (putting up posters, holiday decorations, putting up the crafts that the DC kids made)
• Record Keeping
• Planning menus
• Preparing shopping lists
• Interviews with prospective parents
• Talking to parents and other providers on the phone about daycare
• Research
Time spent networking on Daycare forums for advice!!!! Hint hint

Any time you spend doing daycare related things while the kids are there like cooking and cleaning etc. don't count though. They only count if there are no DC kids in your home. In one of Tom Copeland's books he actually tells you to hang out and not do work like this until after hours so that you can claim it. His actual words are "What should you do when children are taking a nap? Rest, read a book, do nothing!" .

More hours that don't count towards this are things like time spent away from the house like trainings, shopping etc. for daycare related things. For these you should keep track of the mileage but the actual time you spend doing these does not count. Also time spent on general house repairs or maintenance does not count such as cutting the lawn, replacing light bulbs etc. This is all stuff that you would have to do anyway whether or not you had a daycare. These types of things can only be counted if more time was spent on this because of the business such as having to repaint the home every year because of the damage caused by children.

Theres an entire chapter in Tom Copeland's book called Family Childcare Record Keeping Guide titled Figuring Your Time-Space Percentage that talks all about how to do all of this. I highly recommend this book. Borrow it, buy it, steal it (ok maybe not lol) or check it out at the library.

*** On that note, I keep track of my DC related hours when the kids aren't here in a notebook. Wondering if anyone had an actual log that they use that I could see. I'm trying to adopt something easier for me to fill out and keep track of.

Last edited by MarinaVanessa; 10-15-2010 at 10:18 AM. Reason: Pregnancy brain doesn't let me spell correctly
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Old 10-15-2010, 10:08 AM
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Oh and sorry, while I was busy explaining the whole concept of what was allowed and what wasn't I totally forgot to answer your questions . I blame it on the prego brain.

Quote:
I was wondering what kind of hours everyone averages out at the end of the year?
The average time % is usually about 30-40%. If you are only claiming your working hours (time that kids are in your home) then it will be about 30-35% but after adding all of the time you spend doing DC things when kiddos aren't in your home it should be about 35-40%. Some providers have more, some less depending on their hours and how much time they spend doing DC things when they are closed. For example I do alot of the cleaning throughout the day during lunch, snacks, nap and the last hour of DC so I really only claim an extra 30 minutes after my last kiddo leaves and I come down to set-up for the day at 5:30AM so add another 30 minutes before my first one shows up, makes 5 hours a week plus whatever little things I didn;t get done (attendance, meal logs etc.) that I do on Saturdays.

Quote:
Total hours worked?
The average is 55 hours a week for daycare hours.

Quote:
Total hours of prep, cook, clean, shopping, phone calls outside of daycare hours?
Remember shopping doesn't count (unless you are doing it online in your home while there are no kiddos) but I usually log about 5-7 regular hours (cooking, cleaning, preparing food weekdays before/after DC) and about 2 1/2- 4 irregular hours (research, preparing meal plans, bookeeping, curriculum, research etc).

Quote:
My tax lady said If I keep track of my prep, cook, clean, shopping, phone call, etc. hours for a couple of months that she could just take an average of time spent extra out of daycare hours itself
This is true and Tom says so in his book. It says to keep track of at least 2 months worth of your time spent doing DC stuff and then using that as an average for the whole year (if it's regularly like that) and keeping your logs as proof in case you are audited. I don't do it this way, I keep track in a notebook of the actual time that I spend and what I was doing. He also says for you to keep track of the time you spend doing the same things for personal things so that you can show that you do spend time cooking and cleaning for personal use and not claiming all of this time as business time. Does that make sense?
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Old 10-15-2010, 11:54 AM
laundryduchess@yahoo.com laundryduchess@yahoo.com is offline
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Im not exactly sure but it feels like 7 million,... now logisticly I know that cant happen,.. but it does consume alot of my time,... lol. My time space percent is like 38%
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Old 10-16-2010, 01:57 PM
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Default Counting Hours

Counting the hours you spend on business activities in your home after the children are no longer present is probably the single most important thing you can do to reduce your taxes. Every 2 hours you work per week on these activities increases your Time percent by 1%. That's a lot when applied against thousands of dollars of house related expenses.
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Old 10-17-2010, 07:42 AM
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Quote:
Originally Posted by MarinaVanessa View Post
*** On that note, I keep track of my DC related hours when the kids aren't here in a notebook. Wondering if anyone had an actual log that they use that I could see. I'm trying to adopt something easier for me to fill out and keep track of.
I just use an regular 9 x 11, spiral bound, monthly planner book. They are $15-$20 at any office supply store. There is plenty of room for notes about the day, time/space activities, activities with the kids, curriculum planning, purchases, classes, etc.

I would be lost without that thing; my dh calls it my external memory! Believe me it has come in handy at tax time more than once.
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Old 10-17-2010, 10:51 AM
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Originally Posted by DCMom View Post
I just use an regular 9 x 11, spiral bound, monthly planner book. They are $15-$20 at any office supply store. There is plenty of room for notes about the day, time/space activities, activities with the kids, curriculum planning, purchases, classes, etc.

I would be lost without that thing; my dh calls it my external memory! Believe me it has come in handy at tax time more than once.
This is really interesting. I don't know why I never thought about this before. I'm so deffinetely going out today to get one, thanks for the idea. The spiral notebook thing makes it hard for me to find certain days and such, thanks again.
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Old 10-18-2010, 06:51 AM
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Thanks for the info guys! I need to figure it all out, I feel like I spend so much time on daycare outside of daycare hours, but I don't want to sound stingy and claim all of the hours and get audited or something because of it! Does that sound crazy? I feel like on average I spend 30 hours/week outside of my 50hr/week daycare hours! Does that seem like a lot? I think it all adds up because we live in the middle of NO where and no matter where I go it is an hour drive there and back, which adds up real fast! I don't know how to figure out time/space percentage is there an equation or a simple way to figure this out?
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Old 10-18-2010, 06:55 AM
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MarinaVenessa,
I just reread your post! So the time you spend buying things like groceries and supplies does not count? You can just use the milage of getting there and back, but not the time you spend doing these things? Is that correct - if so wow I waste ALOT of time on daycare for it not to be counted and then I need to go back and recalculate all of my outside of daycare hours!
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Old 10-18-2010, 08:50 AM
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Quote:
Originally Posted by JJPlaycare View Post
MarinaVenessa,
I just reread your post! So the time you spend buying things like groceries and supplies does not count? You can just use the milage of getting there and back, but not the time you spend doing these things? Is that correct - if so wow I waste ALOT of time on daycare for it not to be counted and then I need to go back and recalculate all of my outside of daycare hours!
Yes, unfortunately. You can only count the time that you spend in your home doing business related things. If you go outside your home you can only claim the mileage and the expenses but not the time that it takes you to do the shopping for the groceries, craft supplies etc. Sucks doesn't it?

I know of a provider in your shoes that lives out of the way of stores and such and so she buys a lot of her supplies online after DC hours so that she can claim the supply cost, time it takes her to shop for these things, shipping etc. Bummer huh?

This includes any training you may need that is required. You can claim the cost of the training, the mileage, supplies required etc. but if it's a 6 hour training you can't claim the time.
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Old 10-18-2010, 12:10 PM
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THANK YOU, so so much MarinaVanessa!! You have been great helping me to understand this all!! ((((((hugs))))))) That stinks that we can't count travel time and the time we spend in trainings and shopping! Ouch - that really stinks, I am going to have to go back and reconfigure all of my hours! I think I will shop online like your friend! This would save me a TON of time!! Just wanted to say thank you so much for taking all of this time and explaining it all to me!! I know where to find the answers next time!!
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Old 10-18-2010, 12:15 PM
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One more thing so if I am open from 7am - 5 pm Monday - Friday = 50hours a week with children in my care!

I had written down that I spend about 30hours more on all the prep, clean up and such, but in this amount I had travel time, training time and shopping time - so now I need to go back and take tha all out as it does not count!! I guess my question is what is a good average amount of time you guys spend outside of daycare hours on all the extra stuff, just so I know where I stand as far as that! I spend alot of time on daycare, probably more than I should, but I am just wondering if anyone has an average amount of hours so I know where I would stand relative to everyone else! Thanks!
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Old 10-18-2010, 06:16 PM
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Originally Posted by JJPlaycare View Post
One more thing so if I am open from 7am - 5 pm Monday - Friday = 50hours a week with children in my care!

I had written down that I spend about 30hours more on all the prep, clean up and such, but in this amount I had travel time, training time and shopping time - so now I need to go back and take tha all out as it does not count!! I guess my question is what is a good average amount of time you guys spend outside of daycare hours on all the extra stuff, just so I know where I stand as far as that! I spend alot of time on daycare, probably more than I should, but I am just wondering if anyone has an average amount of hours so I know where I would stand relative to everyone else! Thanks!
If you pretty much have the same routine each month and your numbers have been just about the same I believe you can just keep records for 2 months and use the average for these on this years taxes and just keep actual track next year. The only issue I have is that I believe that you either have to keep track of your mileage and exact expenses from trips or you can use the standard mileage rate and keep track of the miles. But you can't do it one way one year and then switch to the other way the next year, so whatever you decide to do this year you'll have to do always.

Oh and thanks for the kudos, I only know all of this because I've been there done that lol. And of course I read and re-read Tom's books. Really, his books have been a lifesaver.
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Old 10-06-2013, 12:24 PM
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I know this post is super ancient, but is their a standard weekly amount of time we can use instead of writing it all down? I can go back and write down my attendance hours I worked with kids, but I probably spent 10+ hours a week cleaning, cooking, and doing other daycare related tasks in the home.
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