Our daycare opened in June.

I used my home for weekly meetings with my business partner from Jan.-May, preparing to open. We also painted and organized our space during this time. Am I able to claim this time as part of my time/space percentage?

Also, I purchased a lot of supplies before our opening date, am I able to claim these expenses and the mileage for obtaining them?

I had assumed I would be able to and had entered all of it in MMK, but then I was just reading one of Tom's articles that said to start claiming expenses when you accepted children for care and I got confused.

Reply

The easy answer is to start counting hours you use your home for business from the day you first start caring for children. Then you would divide these hours by the number of hours from June-December and claim house expenses for June-December. If you counted hours you worked before June you would then divide them by the number of hours from Jan-Dec and claim house expenses from Jan-Dec. The first method gives you a higher time-space % and fewer house expenses. The second method gives you a lower time-space% and higher house expenses. In general, I believe the first method is best because it will probably result in higher deductions.

You can deduct all the expenses (and mileage) you had before you started caring for children.

Reply

Thanks, Tom! Your advice and expertise are appreciated!

Reply