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Daycare and Taxes>What to Bring to Accountant-1st Year
AuntTami 12:04 PM 01-02-2015
I began doing daycare in August. At first I only had a couple drop in kids, and I got my first full timer in October. The second and third full timer didn't come until the beginning December.

When I first started, I had NO idea what I was doing. I kind of just quit my job and decided I'd take care of kids at home! I had no clue that I should have been saving all of my receipts for everything, so I didn't lol.

Now, I know that without receipts, I can't claim any of that money back. Which brings me to my question of, if I don't have ANY receipts(and I don't, why? Because I'm an idiot) what should I bring to the accountant?

I have my receipts I printed for my parents showing how much they paid, but that's about it.

All of our utilities, the checking account, the house, everything is in my hubbys name and since we're not legally married, I can't *prove* that I paid any of our bills or anything since I just gave him cash and he deposited it into the account and then the bills were paid with the debit card, online.

Would written receipts from him(in the future) stating that I gave him xx amount for xx bill be a way to *prove* that I paid the bill? I'm still not understanding how I go about proving that I paid towards the bills. We did just get a joint checking account, but a lot of my families pay in cash. So I know I have to keep a ledger of who paid what and when and I'll keep the deposit receipts too, but then what? How do I prove I paid the bill without having a seperate account, and without being married? We don't use checks, we pay everything online with our debit cards. I have my own debit card for our account, would paying them with MY card vs his card work to show proof?

I usually do my own taxes and use a 1040, since I don't have any "deductions" that I can prove that I paid, should I just skip the accountant this year and file a regular 1040 and just claim the daycare money as "extra income"?

Sorry for so many questions. Taxes come easy to me, but the problems I'm having are coming from all of our stuff being in hubbys name and us not being legally married!
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TomCopeland 03:40 PM 01-02-2015
Originally Posted by AuntTami:
I began doing daycare in August. At first I only had a couple drop in kids, and I got my first full timer in October. The second and third full timer didn't come until the beginning December.

When I first started, I had NO idea what I was doing. I kind of just quit my job and decided I'd take care of kids at home! I had no clue that I should have been saving all of my receipts for everything, so I didn't lol.

Now, I know that without receipts, I can't claim any of that money back. Which brings me to my question of, if I don't have ANY receipts(and I don't, why? Because I'm an idiot) what should I bring to the accountant?

I have my receipts I printed for my parents showing how much they paid, but that's about it.

All of our utilities, the checking account, the house, everything is in my hubbys name and since we're not legally married, I can't *prove* that I paid any of our bills or anything since I just gave him cash and he deposited it into the account and then the bills were paid with the debit card, online.

Would written receipts from him(in the future) stating that I gave him xx amount for xx bill be a way to *prove* that I paid the bill? I'm still not understanding how I go about proving that I paid towards the bills. We did just get a joint checking account, but a lot of my families pay in cash. So I know I have to keep a ledger of who paid what and when and I'll keep the deposit receipts too, but then what? How do I prove I paid the bill without having a seperate account, and without being married? We don't use checks, we pay everything online with our debit cards. I have my own debit card for our account, would paying them with MY card vs his card work to show proof?

I usually do my own taxes and use a 1040, since I don't have any "deductions" that I can prove that I paid, should I just skip the accountant this year and file a regular 1040 and just claim the daycare money as "extra income"?

Sorry for so many questions. Taxes come easy to me, but the problems I'm having are coming from all of our stuff being in hubbys name and us not being legally married!
Simple answer - Get Married!
Ok, assuming that won't happen, here's what you should do.

You must report all your business income on Schedule C, not directly onto Form 1040 as "extra income." If your profit on Schedule C is more than $400 you will owe Social Security tax, in addition to income tax.

Since none of the house bills are in your name, you can only deduct what you can prove you paid towards these expenses. You could try to reconstruct what happened. How much cash did you give your boyfriend each month? When during the month did you give it to him (look at the dates of the deposits)? Was their consistency in how much cash you gave him each month? Was it based on how much you made from parents? What was the money used for? Did your cash pay for half/fourth? of the house bills. Get a statement signed by your boyfriend saying that he took your cash and deposited it and then spent it on various house bills. Start tracking this carefully starting now (today!) going forward for 2015. If you don't have your taxes done until February, you'll have a month of good records that may help you remember what you did in 2014, or can be used as a way to estimate what you did in 2014.
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AuntTami 04:01 PM 01-02-2015
Originally Posted by TomCopeland:
Simple answer - Get Married!
Ok, assuming that won't happen, here's what you should do.

You must report all your business income on Schedule C, not directly onto Form 1040 as "extra income." If your profit on Schedule C is more than $400 you will owe Social Security tax, in addition to income tax.

Since none of the house bills are in your name, you can only deduct what you can prove you paid towards these expenses. You could try to reconstruct what happened. How much cash did you give your boyfriend each month? When during the month did you give it to him (look at the dates of the deposits)? Was their consistency in how much cash you gave him each month? Was it based on how much you made from parents? What was the money used for? Did your cash pay for half/fourth? of the house bills. Get a statement signed by your boyfriend saying that he took your cash and deposited it and then spent it on various house bills. Start tracking this carefully starting now (today!) going forward for 2015. If you don't have your taxes done until February, you'll have a month of good records that may help you remember what you did in 2014, or can be used as a way to estimate what you did in 2014.
The plan for legal marriage is in place, just waiting for a few finishing details to be fixed

So if I'm able to recreate what happened this year, I can claim those expenses for this year?

Thats easy enough since whenever I got cash, I just gave it to him to put into the checking account to pay for bills, which is what we did since my income was so miniscule for a while.
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TomCopeland 08:25 AM 01-03-2015
Originally Posted by AuntTami:
The plan for legal marriage is in place, just waiting for a few finishing details to be fixed

So if I'm able to recreate what happened this year, I can claim those expenses for this year?

Thats easy enough since whenever I got cash, I just gave it to him to put into the checking account to pay for bills, which is what we did since my income was so miniscule for a while.
Yes, if you can recreate your expenses, claim them.
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Tags:accountant, schedule c, tax advice
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