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Daycare and Taxes All things related to Taxes and running a Daycare post here. Topics of tax exemptions, forms, filings, tax write offs, IRS etc.

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Old 01-03-2018, 02:05 AM
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Default Petty Questions

As I was sitting down checking receipts, I was seeing things that I've never deducted before. Postage, for instance. Some of it was strictly for dc, some to former dcfs, can I deduct all those and what would they be listed under? I still pay for household expenses by mail, can I use the T/S formula? (I know, petty) And not sure if it's even worth my time.

Amazon Prime, I use mainly to order dc items, probably more like 75% than my time/space formula I use for all other mixed areas. Can I use 75%?

I'm still confused about the car or mileage area. Most miles I drive are dc and personally related(gift/party/materials shopping or grocery store). Do I use the T/S there too? Would it be more beneficial to depreciate my car that I purchased/paid cash for in July, as well as the expenses since then plus the expenses to my older car before that? I paid around 13K in July for my car. Should I collect all my receipts on both vehicles and bring them to my tax preparer and see which is best?

If I paid for something with gift cards and the final cost out of my pocket was $100, but the original cost was $400, which figure would I focus on?

Thanks Tom!! I'm sure I'll think of more petty questions before April.
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Old 01-03-2018, 08:38 AM
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I was wondering just yesterday as I was going to mail my quarterly fees to the IRS (and discovered I am out of stamps) if I could deduct the cost of the book of stamps. In my case these checks to the IRS are the only mail I send as everything else is on autopay. I wouldn’t be sending them at all if it weren’t for daycare.

Also I have not written off mileage in the past but I am interested in learning more about this. You track your miles to the grocery store and whatnot and there is a certain value you get back per mile such as with tracking meals I am guessing? What if I drive to the grocery store to get daycare groceries but then also get personal groceries? I planned to ask my tax guy in a few weeks when we meet but since someone else brought it up.. I am not interested in going back and doing 2017 but from 2018 forward I wanted to track.
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Old 01-04-2018, 01:44 PM
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Default Expenses

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Originally Posted by Josiegirl View Post
As I was sitting down checking receipts, I was seeing things that I've never deducted before. Postage, for instance. Some of it was strictly for dc, some to former dcfs, can I deduct all those and what would they be listed under? I still pay for household expenses by mail, can I use the T/S formula? (I know, petty) And not sure if it's even worth my time.

Amazon Prime, I use mainly to order dc items, probably more like 75% than my time/space formula I use for all other mixed areas. Can I use 75%?

I'm still confused about the car or mileage area. Most miles I drive are dc and personally related(gift/party/materials shopping or grocery store). Do I use the T/S there too? Would it be more beneficial to depreciate my car that I purchased/paid cash for in July, as well as the expenses since then plus the expenses to my older car before that? I paid around 13K in July for my car. Should I collect all my receipts on both vehicles and bring them to my tax preparer and see which is best?

If I paid for something with gift cards and the final cost out of my pocket was $100, but the original cost was $400, which figure would I focus on?

Thanks Tom!! I'm sure I'll think of more petty questions before April.
Postage to current clients is 100% deductible. Postage to past clients would only be 100% deductible if the letter was directly related to your business. Deduct the time-space % of postage for house related mailings. Call this Office Expenses.
If you are going to deduct 75% of the Amazon Prime, you'll need to keep records showing that 75% of the purchases were used for your business. Otherwise, use your time-space %.
Never use your time-space % for your vehicle. Either use the standard mileage rate ($.535 for 2017) or the actual expenses method. If you have receipts for all your car purchases, then show them to your tax preparer and he/she can tell you what method would be better for you. You can only count a trip as a business trip if the primary purpose of the trip was business. That means more than half of the cost of the items you buy are for your business.
Count the cost of the gift cards as part of the expense. So, count it as a $400 expense.
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Old 01-04-2018, 01:50 PM
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Default Stamps and mileage

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Originally Posted by storybookending View Post
I was wondering just yesterday as I was going to mail my quarterly fees to the IRS (and discovered I am out of stamps) if I could deduct the cost of the book of stamps. In my case these checks to the IRS are the only mail I send as everything else is on autopay. I wouldn’t be sending them at all if it weren’t for daycare.

Also I have not written off mileage in the past but I am interested in learning more about this. You track your miles to the grocery store and whatnot and there is a certain value you get back per mile such as with tracking meals I am guessing? What if I drive to the grocery store to get daycare groceries but then also get personal groceries? I planned to ask my tax guy in a few weeks when we meet but since someone else brought it up.. I am not interested in going back and doing 2017 but from 2018 forward I wanted to track.
You can deduct stamps when you mail items directly related to your business. This includes paying estimated taxes by mail. You can claim $.535 per business mile as an expense, or you can keep track of all your car expenses and claim the business portion of these expenses. You can claim a trip as a business trip if the primary purpose of the trip is business. That means that more than half of the cost of the items you buy must be for your business.
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Old 01-04-2018, 04:10 PM
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Thank you, that was very helpful!
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Old 01-04-2018, 07:12 PM
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Originally Posted by TomCopeland View Post
You can deduct stamps when you mail items directly related to your business. This includes paying estimated taxes by mail. You can claim $.535 per business mile as an expense, or you can keep track of all your car expenses and claim the business portion of these expenses. You can claim a trip as a business trip if the primary purpose of the trip is business. That means that more than half of the cost of the items you buy must be for your business.
Thank you. I am emailing the link to your blog to the tax preparer. There are a lot of things we are not claiming that we are entitled to.
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Old 01-05-2018, 02:04 AM
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Originally Posted by TomCopeland View Post
You can deduct stamps when you mail items directly related to your business. This includes paying estimated taxes by mail. You can claim $.535 per business mile as an expense, or you can keep track of all your car expenses and claim the business portion of these expenses. You can claim a trip as a business trip if the primary purpose of the trip is business. That means that more than half of the cost of the items you buy must be for your business.
More than 1/2 the cost of items...what about weekly trips to the bank or the dump? Dumping trash most likely is more than 1/2 but the bank?
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Old 01-05-2018, 09:16 AM
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Default Mileage

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Originally Posted by Josiegirl View Post
More than 1/2 the cost of items...what about weekly trips to the bank or the dump? Dumping trash most likely is more than 1/2 but the bank?
If the you are depositing one business check and one personal check, that's not more than half the reason you are going to the bank, so I wouldn't count this trip. The question is, what's the primary reason you are going to the bank. If more than half of the stuff you are taking to the dump is exclusively for your business, then count the miles. Otherwise, don't count trips to the dump when you are depositing shared household stuff.
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