Sunchimes 08:42 AM 01-03-2012
First, when you are logging your arrival and departure times, do you round it up or down to the nearest 15 minutes( if they arrived at 6:35 your write 6:30) or do you say 8 hours 25 minutes or that they arrived at 6:35 and left at 5:05?
Second, I had no kids in Jan and February although I was advertising and trying to get them, so officially open. I got my first child on the last day of February. For the first 2 months or so, she stayed in the living room, so I can claim living room,office, dining room, kitchen, and laundry room. Then, I turned my sewing room into the 100% use day care room (I know--I still grieve for it!), which means I used all but the living room the rest of the year. I know the time is figured by the whole year and minutes in the year, so I would divide the hours I worked by the hours in 10 months. For the space, do I figure up each time separately depending on which rooms I used? Feb-July would be 4 rooms while July-Dec would be the entire house. Would I have 2 different time/space numbers and figure expenses for those months by one t/s and use another t/s for the rest of the year?
TomCopeland 09:11 AM 01-03-2012
If your days are sometimes 5 or 10 minutes longer or shorter, you don't need to track your time down to the minute, and so rounding off is fine. This is because things will average out and you don't want to spend a lot of time tracking every minute. However, if you are working longer hours consistently (10 or more minutes a day) then it does make sense to track hours exactly. Every 15 minutes a day you work represents 1% of the year - which is substantial.
The easiest way to deal with your time-space % when you were caring for children for 10 months, is to count the number of hours you used your home for the 10 months and then divide by the total number of hours in 10 months. Then claim expenses for your home for 10 months.
When calculating your space percent, consider whether a room was used regularly for your business over 10 months, not month by month. So, don't track hours by room. Don't claim an exclusive use room unless you used it exclusively for all the months you were caring for children.
You will have only one time-space %.
Sunchimes 09:18 AM 01-03-2012
Originally Posted by TomCopeland:
Don't claim an exclusive use room unless you used it exclusively for all the months you were caring for children.
You will have only one time-space %.
Ok, since I had an exclusive use room for 8 of the 10 months, I can't claim it as a 100% room this year and will have to wait until 2012, right? That's going to cost me big time because it's the largest room in the house. We are talking some significant footage. So, all of that footage is useless since I didn't use it the first 2 months, right? Ouch, that's going to hurt!
TomCopeland 01:18 PM 01-03-2012
I wasn't clear earlier about your situation. I can think of two ways you could claim an exclusive use room. You said that you were looking for children in January and February, even though your first child didn't come until March. If the room you want to claim as exclusive use was used exclusively as of January, then you wouldn't have any trouble claiming it as exclusive use for the year. If you used the exclusive use room for personal purposes in January and February, and started using it exclusively for business in March, then you could probably still claim this as exclusive use by saying you were in business for 10 months. The IRS has not clarified this point. Clearly, if a provider used a room for business and personal purposes for several months, and then used exclusively for business, she could not claim exclusive use for the year.