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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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  #1  
Old 04-08-2018, 12:45 PM
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Default Need Desperate Help Figuring Out T/S Please

I need serious help with my t/s%. I have all the measurements, but I just don't know how to do it right. I just bought Tom's book, so once i get it, I will be so much smarter, but for now, can someone show me how to figure this?

As far as my time, I already have how many actual hours I care for children. It is 2,248. That does not take into account anything else that you can claim time for, researching, cleaning, interviews, etc. I do training online, so that's 10 hours a year I do with that also. So I was kinda figuring a total with that of about 2800 hrs a year. Does that seem about right? So that's 32%

As far as my space, this is what I have, but I have zero idea how to calculate it.

According to the township, we have 1,827 square feet in our house. It's a 1 story ranch with basement. We don't use the basement for daycare, but I do have a laundry room down there that I use for washing sheets for the kids, blankets, bibs etc.
That room is 10 X 6, so 60 sq feet

In addition, these are my measurements:

Playroom used 100% exclusively for daycare is 10 X 12 = 120 sq feet

Hall and entrance way is 131 square feet

Living Room 294 square feet

Kitchen/dining 228 square feet

My bedroom which I do planning in the evening, going over records etc. No kids use my room. 180 square feet

My sons room I have a desk in there since he's in school and I do computer work in there. 144 square feet

My daughters room 144 square feet and my own bathroom in my bedroom is 30 square feet. I don't use these 2 rooms at all for daycare.

Main Bathroom 72 square feet

Garage that houses all the outside toys is 676 square feet.


Can someone please help me and show me how to figure this? Thank you so much. This is my last hurdle this year!
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  #2  
Old 04-08-2018, 01:06 PM
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Originally Posted by lovemykidstoo View Post
I need serious help with my t/s%. I have all the measurements, but I just don't know how to do it right. I just bought Tom's book, so once i get it, I will be so much smarter, but for now, can someone show me how to figure this?

As far as my time, I already have how many actual hours I care for children. It is 2,248. That does not take into account anything else that you can claim time for, researching, cleaning, interviews, etc. I do training online, so that's 10 hours a year I do with that also. So I was kinda figuring a total with that of about 2800 hrs a year. Does that seem about right? So that's 32%

As far as my space, this is what I have, but I have zero idea how to calculate it.

According to the township, we have 1,827 square feet in our house. It's a 1 story ranch with basement. We don't use the basement for daycare, but I do have a laundry room down there that I use for washing sheets for the kids, blankets, bibs etc.
That room is 10 X 6, so 60 sq feet

In addition, these are my measurements:

Playroom used 100% exclusively for daycare is 10 X 12 = 120 sq feet

Hall and entrance way is 131 square feet

Living Room 294 square feet

Kitchen/dining 228 square feet

My bedroom which I do planning in the evening, going over records etc. No kids use my room. 180 square feet

My sons room I have a desk in there since he's in school and I do computer work in there. 144 square feet

My daughters room 144 square feet and my own bathroom in my bedroom is 30 square feet. I don't use these 2 rooms at all for daycare.

Main Bathroom 72 square feet

Garage that houses all the outside toys is 676 square feet.


Can someone please help me and show me how to figure this? Thank you so much. This is my last hurdle this year!
I'm adding this up and it does not come to 1,827 square feet in my house like my township assessor says. That's why my ratios the way I'm figuring it is so low. The rooms/hallways/baths that I add up come up 500 square feet short. So should I take 1,827 and subtract what my daughters room is, since the rest of the house is being used by either me or the daycare kids for the business?
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Old 04-08-2018, 01:57 PM
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Based on your #'s and Tom's blogs, I calculated your t/s% at 33.38%

I don't know what yours usually runs but mine is generally between 28% and 34%
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Old 04-08-2018, 02:56 PM
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Originally Posted by BumbleBee View Post
Based on your #'s and Tom's blogs, I calculated your t/s% at 33.38%

I don't know what yours usually runs but mine is generally between 28% and 34%
Thank you BB. If possible, can you write here how you got that? The last tax preparer that did mine put me down for 25%, this one doing it now has it at 23%, but that is exactly what you get if you divide 40 hours a week for a year divided by total hours in a year, so she's not doing any calculations really. If I could see how you got that number, it would be a huge help! I definitely like that percentage!
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Old 04-08-2018, 06:31 PM
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Time percentage: 2800 hours worked divided by 8,760 (hours in a year) =0.3196 x 100 = 31.96%

Space Percentage:
Exclusive Use: 120 sq ft divided by 1,827 sq feet = 0.0656 x 100 = 6.56%
Partial Use: 1,533 sq ft divided by 1,827 sq feet = 0.839 x 100 = 83.9%


Time/Space % of home without exclusive use area: 31.96% (Time) x 83.9% (Space) = 26.81% + 6.56% (Exclusive Use) = 33.38%

I used Tom's Blog here: http://tomcopelandblog.com/the-exclusive-use-rule

The partial use square footage I calculated by taking your homes square footage of 1,827 then subtracting the room not used for daycare (144 sq ft) and the bathroom not used for daycare (30 sq feet) as well as the exclusive use area (120 sq feet).

I hope that helps some. I'm not a professional tax person so my calculations could be wrong. There are much more knowledgeable people about this kind of stuff on this forum for sure! I am not one of them. lol
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Old 04-09-2018, 05:50 AM
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I am copying this and sending it to my tax person. Thank you so much BB!!!
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Old 04-09-2018, 10:54 AM
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Default time-space%

Quote:
Originally Posted by BumbleBee View Post
Time percentage: 2800 hours worked divided by 8,760 (hours in a year) =0.3196 x 100 = 31.96%

Space Percentage:
Exclusive Use: 120 sq ft divided by 1,827 sq feet = 0.0656 x 100 = 6.56%
Partial Use: 1,533 sq ft divided by 1,827 sq feet = 0.839 x 100 = 83.9%


Time/Space % of home without exclusive use area: 31.96% (Time) x 83.9% (Space) = 26.81% + 6.56% (Exclusive Use) = 33.38%

I used Tom's Blog here: http://tomcopelandblog.com/the-exclusive-use-rule

The partial use square footage I calculated by taking your homes square footage of 1,827 then subtracting the room not used for daycare (144 sq ft) and the bathroom not used for daycare (30 sq feet) as well as the exclusive use area (120 sq feet).

I hope that helps some. I'm not a professional tax person so my calculations could be wrong. There are much more knowledgeable people about this kind of stuff on this forum for sure! I am not one of them. lol
This looks correct.
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Old 04-09-2018, 02:39 PM
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Originally Posted by TomCopeland View Post
This looks correct.
Thank you! Seeing it all broken down like this makes complete sense.
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  #9  
Old 04-09-2018, 06:02 PM
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Quote:
Originally Posted by TomCopeland View Post
This looks correct.
Thank you Tom I appreciate you taking the time to answer questions and chime in on this forum.

On a side note, I was pretty stoked to see your reply that my calculations looked correct! thank you so much!
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  #10  
Old 04-09-2018, 08:11 PM
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Originally Posted by BumbleBee View Post
Thank you Tom I appreciate you taking the time to answer questions and chime in on this forum.

On a side note, I was pretty stoked to see your reply that my calculations looked correct! thank you so much!
Thank you both for helping me! Much appreciated!
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