Taxes - Estimating Consumables

[misol]

Ok, since I am asking tax questions after April 15, you can probably guess that I had to file for an extension

Anyway this was my first year doing daycare and my recordkeeping was not stellar. I kept fairly organized but as it turned out, my filing system was all wrong so I basically had to start over. I bought daycare software and have just about finished entering all of my payments and expenses. Luckily, since I know all of this now, things will be much better next year.

I made the mistake of not keeping grocery store receipts because I was planning to just use the standard meal deduction and didn't think I needed them. It didn't occur to me back then that I would need them to prove all of my other non-food grocery store purchases.

Since I don't have receipts, what is the best way for me to get a conservative estimate of my consumable items? My own family consists of 3 adults and 2 children. I started daycare in Sept 09. In September and October I had 1 f/t kid enrolled. November I had 2 f/t kids enrolled.
December I had 2 f/t and 2 p/t kids enrolled

Also, anyone have any tips for increasing my time/space percentage?

Borrowed the FCC Record Keeping Guide (7th ed) from teh library but haven't completely gotten through it yet. Wish I had read this before I started my business!

Any help and suggestions would be appreciated.

[grandmom]

I'm not a tax person so this is just my suggetion. I'm guessing you will need to just estimate. So how many rolls of toilet paper do you buy in a month? You can deduct your time/space percentage. Then go to the next thing. With a family that size you will be ok with t/s% I'd guess. But be conservative because you could be audited and lose big time with no receipts.

As for how to increase the t/s%. I don't know the exact wording, but Tom Copeland says something like if you use the room occasionally, even if dc children are not in the room, you can claim it. So where do you store your old records, and toys you aren't using? Surely not in the daycare space. Those could go in your garage, or kids' room. Thus increasing the space part. As far as time....work more hours?

Find everyting Tom Copeland has written and trust it like the gospel.

[originalkat]

Check on page 22 in the Seventh edition Record Keeping Guide. It covers reconstructing your records. This may give you some ideas of how to go about estimating and documenting your supplies.

As far as your time/space percentage...mine is usually between 28-34 %. I use all but about 100 square feet of my home and I use my hours of operation for the time part. You just have to use the real numbers and accept that as an accurate figure. Also, some items you can use the Actual Business % instead of time/space percentage. Like printer ink for example. At least 75% of the ink is used for mu business so that gives me a greater deduction than using the time/space %.

[misol]

I'm not a tax person so this is just my suggetion. I'm guessing you will need to just estimate. So how many rolls of toilet paper do you buy in a month? You can deduct your time/space percentage. Then go to the next thing. With a family that size you will be ok with t/s% I'd guess. But be conservative because you could be audited and lose big time with no receipts.

As for how to increase the t/s%. I don't know the exact wording, but Tom Copeland says something like if you use the room occasionally, even if dc children are not in the room, you can claim it. So where do you store your old records, and toys you aren't using? Surely not in the daycare space. Those could go in your garage, or kids' room. Thus increasing the space part. As far as time....work more hours?

Find everyting Tom Copeland has written and trust it like the gospel.

Thanks. Plan to be VERY conservative in my estimates but don't even know where to start. I guess since I have until October, I can track usage for the next couple of months and use that as my figure.

Check on page 22 in the Seventh edition Record Keeping Guide. It covers reconstructing your records. This may give you some ideas of how to go about estimating and documenting your supplies.

As far as your time/space percentage...mine is usually between 28-34 %. I use all but about 100 square feet of my home and I use my hours of operation for the time part. You just have to use the real numbers and accept that as an accurate figure. Also, some items you can use the Actual Business % instead of time/space percentage. Like printer ink for example. At least 75% of the ink is used for mu business so that gives me a greater deduction than using the time/space %.

Thanks originalkat this helps a lot. I calculated my t/s % and it's at 31% so I guess I'm not that far off. I used my attendance for the time part. Since you used your hours of operation, do you have kids there from the time you open until the time you close everyday? I open at 7:30 but my first child doesn't get here til 8:30. I wanted to use my hours of operation but the book said not to

[GretasLittleFriends]

I wish we could use our hours of operation as the time part. I'd have close to 100%. My hours are listed Sun - Sat 12am - 11:59p. I'm 24/7 with the exception of the days I'm closed.

However, one people forget to include or keep track of, is the time you spend working for your daycare even though children aren't present. (Time you're researching your business related tax stuff, time spent prepping your curriculum, whatever, as long as it's for your daycare.)

[originalkat]

Yes, My first child comes at 7:10 and the last leaves at 5:30. My hours are 7-5:30