Things We Can Do NOW To Save On Taxes Or Prepare For Tax Time?

[jojosmommy]

Are there things we can be doing to prep for tax time now? I usually try to wrap things up (payments, w-10's, paperwork and reciepts etc) around the end of the year but always find myself tax obsessed Jan-Feb.

Are there things we should be doing money wise also? Last year at your Taxes and Record Keeping training in Jan you mentioned things like the savers tax credit and taking pictures of kids toys which they recieved at Christmas if they will be shared daycare toys in order to write them off. Are there other things?

How about employee wise? This year I took advantage of hiring an employee. I pay my husband, he is my PT employee here at daycare and we have a third party handle his paycheck, and tax deductions, as well as the medical reimbursements we pay him. Are there other things I should be doing on this front?

THANKS!!!

[Crystal]

I spend $1000-$1500 every December on things JUST for the daycare. It is a greta time for deals and I save alittle on my taxes.

[TomCopeland]

end of year

Are there things we can be doing to prep for tax time now? I usually try to wrap things up (payments, w-10's, paperwork and reciepts etc) around the end of the year but always find myself tax obsessed Jan-Feb.

Are there things we should be doing money wise also? Last year at your Taxes and Record Keeping training in Jan you mentioned things like the savers tax credit and taking pictures of kids toys which they recieved at Christmas if they will be shared daycare toys in order to write them off. Are there other things?

How about employee wise? This year I took advantage of hiring an employee. I pay my husband, he is my PT employee here at daycare and we have a third party handle his paycheck, and tax deductions, as well as the medical reimbursements we pay him. Are there other things I should be doing on this front?

THANKS!!!

As a general rule, it's better to pay for business items in December, rather than January, because you can get the tax deduction on this year's tax return, rather than waiting a year. If you planned to buy items costing more than $100, buy them in 2012 because of the 50% bonus depreciation rule. Also, review your records to make sure you have counted all the miles you drove, all the hours you worked after children were gone, and all the meals you served.

[Abigail]

Tom, what do you mean buy items that are $100 or more in 2012 for the rule? I am debating whether to buy a $120 bounce house for daycare, but I thought ANYTHING we bought exclusively for daycare, like toys, was 100% deducted if we have the receipt? We don't have kids yet so everything is all for daycare.

[TomCopeland]

Deductions

Tom, what do you mean buy items that are $100 or more in 2012 for the rule? I am debating whether to buy a $120 bounce house for daycare, but I thought ANYTHING we bought exclusively for daycare, like toys, was 100% deducted if we have the receipt? We don't have kids yet so everything is all for daycare.

You are correct. If you buy something that costs more than $100 and is used more than 50% for your business, you can use the Section 179 rule and deduct the business portion in one year, rather than depreciating it. In your case, you would deduct 100% of the cost.

For items you bought that cost more than $100 and are not used more than 50% in your business, you can use the 50% bonus depreciation rule, and deduct the business portion in 2012.