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Daycare and Taxes>Profit or Loss?
GrannyJ 12:36 PM 01-28-2012
I am confused about reporting a loss. I thought you could only report a loss two years in a row. Yet I saw on a post here where some daycares declare a loss every year.
In '08 and '09 I reported a loss then in '10 I reported a profit but it was only around $300. This year I will definitely be in the red so how would I report that? Can I take the loss because it is going to be a big one, or do I just not report everything I bought???
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Michael 02:17 PM 01-28-2012
Tom will probably post some information. Feb 9th is fast approaching and it would be a good idea to register for our Tax Webinar with Mr Copeland if you haven't already done so.

2011 Tax Changes for Family Child Care Providers

http://www.daycare.com/news/taxes/to...d-webinar.html
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TomCopeland 12:05 PM 01-29-2012
Originally Posted by GrannyJ:
I am confused about reporting a loss. I thought you could only report a loss two years in a row. Yet I saw on a post here where some daycares declare a loss every year.
In '08 and '09 I reported a loss then in '10 I reported a profit but it was only around $300. This year I will definitely be in the red so how would I report that? Can I take the loss because it is going to be a big one, or do I just not report everything I bought???
There is no rule that says you can't report losses for years and years in a row. If you do, however report a loss three out of five years, the IRS is much more likely to audit you. This is because a for profit business (such as family child care) must show that it's trying to make a profit, otherwise the IRS could determine that you are not running a business and deny many of your deductions.

Claiming occasional losses for your business is fine.
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