More Tax Questions

[tammy]

Instead of making a whole bunch of posts, I thought I would make just one.

1) I just started a pest control service. This is something that I have had to do because of licensing requirements (of having no evidence of pests in the home). I would haven't started the service otherwise. Is it ok to deduct the entire fees for this service? Or can I only to a portion?

2) When calculating miles for my car, how is it done exactly? For example I am headed into town to run a few errands and one or two daycare errands are on the list. Do I calculate the miles it would take from my home to the place I needed to go for daycare and back for each place? Do I make it a combine trip with only daycare places round trip to my home? Or would I only calculate the few miles from place to place and only include the miles to the places I needed to go to for daycare? ....hope I am making sense...

3) I kinda understand the space/time thing in my home. I do have a place that is dedicated to only daycare, but I also use a few other rooms in my home as shared space. How do I calculate this for utilities?

4) If I decided to use the time/space% for home improvements and part of my mortgage/taxes/insurance will I be liable to pay IRS capitol gains tax if I ever decide to sell my home?

5) How exactly does the hours worked tax credit/deduction work?


Thanks for allowing this awesome forum to letting me ask these tax questions! happyface

[tammy]

I saw the other post that pertains to my question 3. I just need to really learn how to calculate the time/space %
Thanks!

[Michael]

Lots of time space threads here: https://www.daycare.com/forum/tags.p...ace+percentage

[tammy]

Thanks! Will read through them.

Lots of time space threads here: https://www.daycare.com/forum/tags.p...ace+percentage

[TomCopeland]

Questions

Instead of making a whole bunch of posts, I thought I would make just one.

1) I just started a pest control service. This is something that I have had to do because of licensing requirements (of having no evidence of pests in the home). I would haven't started the service otherwise. Is it ok to deduct the entire fees for this service? Or can I only to a portion?

2) When calculating miles for my car, how is it done exactly? For example I am headed into town to run a few errands and one or two daycare errands are on the list. Do I calculate the miles it would take from my home to the place I needed to go for daycare and back for each place? Do I make it a combine trip with only daycare places round trip to my home? Or would I only calculate the few miles from place to place and only include the miles to the places I needed to go to for daycare? ....hope I am making sense...

3) I kinda understand the space/time thing in my home. I do have a place that is dedicated to only daycare, but I also use a few other rooms in my home as shared space. How do I calculate this for utilities?

4) If I decided to use the time/space% for home improvements and part of my mortgage/taxes/insurance will I be liable to pay IRS capitol gains tax if I ever decide to sell my home?

5) How exactly does the hours worked tax credit/deduction work?


Thanks for allowing this awesome forum to letting me ask these tax questions! happyface

Since the pest control was a requirement of licensing, deduct 100% of the cost.

When claiming car trips, you can only count trips that are primarily for your business. If you make several stops, some business and some personal, only count the miles from your home to the business location and back.

You want to claim the time-space % of home improvements, mortgage interest, and property taxes. This will not affect anything when you sell your home. However, you will have to pay taxes on the home depreciation you claimed, or were entitled to claim - so you also want to claim home depreciation.

I don't understand your question #5. Please clarify.

[tammy]

Thanks for answering my questions again.

To clarify #5; I have been seeing that I can track hours that I work for business while in the home. This counts all open hours worked, and "off the clock" hours. How do I convert that to $ for tax purposes?

[TomCopeland]

Hours worked

Thanks for answering my questions again.

To clarify #5; I have been seeing that I can track hours that I work for business while in the home. This counts all open hours worked, and "off the clock" hours. How do I convert that to $ for tax purposes?

Don't count "hours open." Count hours children are present plus all other hours you worked in your home on business activities when children were not present. The more hours you work, the higher your time-space percentage. You will use your time-space percentage against all your house expenses (property tax, mortgage interest, house repairs, utilities, house insurance, and home depreciation). This represents a lot of business deductions.