Tax Help- New Provider No Clients

[mamac]

Ok here's my situation- Sorry for all the questions as a newbie....

I took my licensing classes in June 2012. I didn't receive my license until the end of Nov 2012. I haven't gotten any clients yet, but I have spent A LOT of time and money in preparation of opening my home daycare. I started purchasing items before I began any classes.

What can I deduct in taxes for 2012? I have a lot of receipts for nearly everything I purchased (many of them are written by me- craigslist items). Toys, organization items, home remodeling, this laptop, etc. are some of my expenses.

Is it a waste of my money to hire someone to do my taxes for me? I have been unemployed since the beginning of Dec. My husband always does our taxes but I'm sure he is not familiar with the whole Time/Space thing. (if that would even apply yet, as I'm not really using my "space" for daycare.

Do I even bother with deductions at this point?

I understand that Tom Copeland's book is the place to go, but as it's currently tax time there's no way I have time to really educate myself on this matter. I am hoping there is an easy answer out there.

[TomCopeland]

New provider

You can't start claiming business expenses on your tax return until your business begins. Your business begins when you are ready to care for children and are telling others that you are ready.

So, if you were caring for even one child in 2012, or you were ready to care for children but couldn't find any customers, then you can claim your business expenses in 2012. If not, claim all your business expenses from 2012 on your 2013 tax return. It sounds like this is the case for you.

Join me for a webinar “2012 Tax Changes: How to Avoid Mistakes on Your Tax Return” Tuesday, February 12th at 8:30-10:00pm Eastern Time. The cost is $25 (100% tax deductible!). To register: http://events.r20.constantcontact.co...&llr=yatrx4cab

[kluna1014]

You can't start claiming business expenses on your tax return until your business begins. Your business begins when you are ready to care for children and are telling others that you are ready.

So, if you were caring for even one child in 2012, or you were ready to care for children but couldn't find any customers, then you can claim your business expenses in 2012. If not, claim all your business expenses from 2012 on your 2013 tax return. It sounds like this is the case for you.

Join me for a webinar “2012 Tax Changes: How to Avoid Mistakes on Your Tax Return” Tuesday, February 12th at 8:30-10:00pm Eastern Time. The cost is $25 (100% tax deductible!). To register: http://events.r20.constantcontact.co...&llr=yatrx4cab

I was licensed October 2, 2012. I have a TON of "start-up" costs, if that's what I should call them. Such as buying more toys (I have a daughter, so we had some toys) but did not want to use all of her toys for the DC. Also, I have expenses from things I needed to do for licensing (that we wouldn't have done if I wouldn't have been getting licensed) such as, furnace check-up & cleaning (it was a yr old but licensing still wanted this), put a railing on our steps on our deck (later on they told me I didn't actually have to do that, which is frustrating that we spent $80 and didn't need to) and other random things around the house (shelving to make things out of reach for kids). Can I deduct ANY of that stuff even though I wasn't licensed yet? I did watch a couple of kids here and there while I was in the process of licensing but wasn't technically "ready" to operate my business because of all of the requirements to become licensed.

I hate tax time.

[mamac]

So, if you were caring for even one child in 2012, or you were ready to care for children but couldn't find any customers, then you can claim your business expenses in 2012. If not, claim all your business expenses from 2012 on your 2013 tax return. It sounds like this is the case for you.

Technically I was able to take clients at any time once I received my license which was right near Thanksgiving. I'm not sure many people were looking for a new daycare around the holidays but I did tell everyone I knew that I was ready to go once I got a phone call. (Honestly, I was sort of relieved there were no calls because I just couldn't see jumping into a new daycare routine just before Christmas with two little ones of my own at home.)

If I can just wait until this year that would make everything so much easier for me. It would give me time to figure out what I'm doing. Won't the dates on the receipts disqualify me from claiming them for 2013 though?

[TomCopeland]

In business?

I was licensed October 2, 2012. I have a TON of "start-up" costs, if that's what I should call them. Such as buying more toys (I have a daughter, so we had some toys) but did not want to use all of her toys for the DC. Also, I have expenses from things I needed to do for licensing (that we wouldn't have done if I wouldn't have been getting licensed) such as, furnace check-up & cleaning (it was a yr old but licensing still wanted this), put a railing on our steps on our deck (later on they told me I didn't actually have to do that, which is frustrating that we spent $80 and didn't need to) and other random things around the house (shelving to make things out of reach for kids). Can I deduct ANY of that stuff even though I wasn't licensed yet? I did watch a couple of kids here and there while I was in the process of licensing but wasn't technically "ready" to operate my business because of all of the requirements to become licensed.

I hate tax time.

Once you started caring for children you were in the business of family child care. It didn't matter that you weren't yet licensed. So, yes you can claim all of your expenses in 2012. If claiming these expenses creates a loss, that's okay.

[TomCopeland]

In business?

Technically I was able to take clients at any time once I received my license which was right near Thanksgiving. I'm not sure many people were looking for a new daycare around the holidays but I did tell everyone I knew that I was ready to go once I got a phone call. (Honestly, I was sort of relieved there were no calls because I just couldn't see jumping into a new daycare routine just before Christmas with two little ones of my own at home.)

If I can just wait until this year that would make everything so much easier for me. It would give me time to figure out what I'm doing. Won't the dates on the receipts disqualify me from claiming them for 2013 though?

Technically, you were in business in 2012 because you were ready to care for children and telling others you were ready. This means you should show your expenses in 2012. However, because you didn't have any income you could get away with treating 2013 as your first year in business. If you do so, claim your 2012 receipts as expenses for 2013. The dates on the receipts don't matter in your situation.

[mamac]

What a relief that is! Apparently the bookstores around here don't have any of your books in stock so I've got to order them. At least I'll have enough time to read through them for next years tax returns. Thanks for the help!