Depreciation

[LittleCrawfishCC]

Can someone tell me how this all works? I actually bought a house full of new furniture before I started in June (Bought in April, $12000 worth). I was also wondering about the depreciation in my vehicle too..
Thanks!

[Michael]

https://www.daycare.com/forum/tags.php?tag=depreciation

[TomCopeland]

Depreciation

When you start your business you have a house full of stuff - furniture, appliances, equipment, etc. Once you start using it for your business, you are entitled to depreciate this stuff. Apply your time-space % to the value of the items at the time your business began and depreciate them over 7 years.

If you don't have receipts for these items, take pictures and estimate their value.

For example, if the value of your items was $10,000 and your time-space % was 40% your business portion is $4,000. Your depreciation deduction would be about $570 a year.

If you use the standard mileage method for claiming car expenses, you can't depreciate your home. If you use the actual cost method you can depreciate your car based on its fair market value at the time you first start using it in your business.

[LittleCrawfishCC]

If you use the standard mileage method for claiming car expenses, you can't depreciate your home. If you use the actual cost method you can depreciate your car based on its fair market value at the time you first start using it in your business.






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Okay, i am a little confused? Can you explain, im so sorry.

[TomCopeland]

Depreciation

Sorry! I meant to write, "If you use the standard mileage method for claiming car expenses, you can't depreciate your car."

[LittleCrawfishCC]

Oh Okay! I understand now :-) Thanks so much!

[LittleCrawfishCC]

I am actually in the process of purchasing some of your books? Which ones would be the best for a newbie? Should I buy the book for 2011, I started in August, so I am not sure, right now I am just using excel for everything. I was wondering if I should even worry about depreciating this year, because as of now, all of my expenses are double the amount that I will make?

[TomCopeland]

depreciation

The best book of mine for new providers is the Family Child Care Record Keeping Guide. It identifies over 1,000 allowable deductions and give directions on how to keep records. You should start depreciating items this year (furniture, appliances, etc.) even if you will show a loss. Losses will reduce any other income your family earns.