Viable Business?

[Miss Binney]

Hey everyone!

I have worked in early childhood for over 20 years. I have done a little bit of everything - trainer, teacher, administrators, etc. Right now I am seriously underemployed and desperately need a change. I am considering doing family child care in my home. I found this forum yesterday and was SUPER excited by all the tax benefits. But... am I missing something? It seems like there are so many things you can deduct from your taxes, which is awesome but are you actually making a good income? I’m seeing several posts about the amount of taxes people are paying right now. It seems like if there are all of these deductions, you wouldn’t really end up paying anything?? What am I missing here...lol?

[Cat Herder]

"What am I missing here...lol?"

Spouses income. I'd never owe on my own even with the self-employment tax.

For me, it increased my income. I was also management. That increase was in part the tax breaks but also the loss of fuel costs, clothing costs, childcare costs, car payments, sick days off, etc.

[storybookending]

Mine are high because I am not married and have no dependents. I asked my tax guy the year I opened if there was anything I could do to make my quarterly payments smaller and he said “pop out a few kids”.

My cousin who makes almost identical to what I make in a year but has a lot less by way of expenses and also a much smaller t/s% pays in $1000 less a quarter than me. Why? She’s married with a husband getting the max taken out of his checks and has two children.

[nanglgrl]

There are also things that tax code doesn’t properly cover when it comes to home daycare. There are a lot of deductions but you have to keep in mind that you only get a portion (the time/space percentage) amount of most deductions. In addition, there is just way more wear and tear on your home and items in your home that can’t be deducted properly. For instance, the handle on my screen door broke in half. It broke because parents let their small child grab on to it when they open my screen door..basically their children hang off the metal handle. It likely never would have broken if it it weren’t for home daycare and it looks like we will have to replace the entire door unless we want the outside of the house to look funny. I can’t just deduct the entire cost of a new door. There are many things like this in home daycare.

[Daycarefamily]

Employing your kids under 18 can really help. IRS doesn't like it but if you do it properly they will leave you alone.

[Daycarefamily]

Also if you own an expensive home this can help a great deal!!