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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 03-18-2021, 05:38 PM
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bzzzybee bzzzybee is offline
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Default TS% Question for Tom

My daycare was open from January through mid march last year, I never reopened the entire year and I do not intend to reopen again. So I am figuring my hours worked in total (both with kids and without kids present) for the 2.5 months I was open are 367 hours. The hours available for this time (line 5 on form 8829) is 1920 hours. I used 96% of my home for regular daycare use and that gives me a total of 18.35% in my time-space percentage.

So two questions:
1. Last year when I worked a full year (1523 hours) my TS% was 16.69% and I worked the entire year still using 96% of my home. Am I missing something that this year I would have a higher TS% but working less hours? I've rechecked my math over and over and keep coming up with the same numbers for this year.

2. Am I okay to calculate the TS% on the lump sum I paid for things like my mortgage interest and homeowners insurance? Or do I need to break that down to what would have been spent over 12 months?
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Old 03-21-2021, 02:16 PM
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TomCopeland TomCopeland is offline
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Default time-space %

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Originally Posted by bzzzybee View Post
My daycare was open from January through mid march last year, I never reopened the entire year and I do not intend to reopen again. So I am figuring my hours worked in total (both with kids and without kids present) for the 2.5 months I was open are 367 hours. The hours available for this time (line 5 on form 8829) is 1920 hours. I used 96% of my home for regular daycare use and that gives me a total of 18.35% in my time-space percentage.

So two questions:
1. Last year when I worked a full year (1523 hours) my TS% was 16.69% and I worked the entire year still using 96% of my home. Am I missing something that this year I would have a higher TS% but working less hours? I've rechecked my math over and over and keep coming up with the same numbers for this year.

2. Am I okay to calculate the TS% on the lump sum I paid for things like my mortgage interest and homeowners insurance? Or do I need to break that down to what would have been spent over 12 months?
Your numbers are correct. The average number of hours you worked in a week in 2020 was higher than it was in 2019, that's the difference. Break down mortgage interest and insurance for what it would be for the months you were open.
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Old 03-21-2021, 11:07 PM
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Hi, it's calcare
I'm confused. Are you saying we can use the nice big number from the months that we were open and use that time space percentage for the entire year, even if we were closed most of the months? Cause I added up time space using the few hours I was open and came up with like 8%, which I expected, I knew that would be the case when I closed. And then I used that 8% time space for the entire year rent, utilities, etc.

Tom, are you saying there is a more advantageous way? Thanks!
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Old 03-26-2021, 11:38 AM
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TomCopeland TomCopeland is offline
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Default time-space %

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Originally Posted by Unregistered View Post
Hi, it's calcare
I'm confused. Are you saying we can use the nice big number from the months that we were open and use that time space percentage for the entire year, even if we were closed most of the months? Cause I added up time space using the few hours I was open and came up with like 8%, which I expected, I knew that would be the case when I closed. And then I used that 8% time space for the entire year rent, utilities, etc.

Tom, are you saying there is a more advantageous way? Thanks!
If you use the larger time-space% for the months you were open, then you can apply that percentage to your house expenses for those months only. Or, you can calculate your time-space% based on the entire year, and then apply this percentage to your house expenses for the entire year.
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