Abigail 03:35 PM 10-02-2014
Do I deduct these over years or is it a one-year expense?
Last year was my first year and doing our daycare taxes was just over $300 and I also had to pay our city planning board $200 to expand my home daycare license last year. Can I write these off as expenses or do I need to deduct them for years?
TomCopeland 01:04 PM 10-03-2014
Originally Posted by Abigail:
Do I deduct these over years or is it a one-year expense?
Last year was my first year and doing our daycare taxes was just over $300 and I also had to pay our city planning board $200 to expand my home daycare license last year. Can I write these off as expenses or do I need to deduct them for years?
Income taxes are not deductible. License fees are 100% tax deductible in the year you pay them.
Abigail 01:25 PM 10-03-2014
Opps, I meant depreciate for the tax fee. The tax professional fee was high because they did my daycare taxes so I don't understand why at least part of that fee I was charged isn't able to be used.
So the licensing fee of $200 can be charted under my exclusive fees category for the whole amount even though it's over the rule of thumb amount so it doesn't need to be depreciated?
TomCopeland 05:24 PM 10-03-2014
Originally Posted by Abigail:
Opps, I meant depreciate for the tax fee. The tax professional fee was high because they did my daycare taxes so I don't understand why at least part of that fee I was charged isn't able to be used.
So the licensing fee of $200 can be charted under my exclusive fees category for the whole amount even though it's over the rule of thumb amount so it doesn't need to be depreciated?
Deduct the tax preparation fee in one year, don't depreciate it. However, you can only deduct the fee associated with filing your business tax forms (Schedule C, Form 8829, Form 4562, Form 1040SE). Ask him/her to break out this cost.
A new rule allows providers to deduct any expense under $200 in one year, rather than depreciating it. Even if your license fee or tax preparer fee was over $200, it still can be deducted in one year because it's a fee for a service.