Taxes: Equipment Write Off Question

[legomom922]

So Tom Copeland agreed we need to copy & keep reciepts so they dont fade etc. So I want to buy a scanner/copier to do this. My question is, if I am buying this equipment only for my daycare and otherwise I would NOT be needing it, is this considered a 100% business expense? Now to add to this, since I will be having a copier now in my home, if I use it to copy something else, then would it not be a 100% buisness expense? Maybe then I would have to use the % of business its used for? Say 90%?

I guess I am confused, because my ONLY purpose for buying it is because I have a daycare, but I COULD also use it for other stuff because now it would be more conveinant than running to the store to make a copy of something.

Does this make sense?

[TomCopeland]

100% or not?

Items you purchase are deductible as a business expense based on how you use them, not why you bought them. So, if you bought a scanner/copier only because of your business but you used it for personal purposes, it's not a 100% business expense. Sorry!

On the other hand - what if you bought a toy for your own child's birthday. If your child only used it personally it's not a business deduction. But if your child played with this toy with the other day care children, now you can deduct the business portion of the toy (use your time-space percentage).

Tom

[legomom922]

Thanks Tom! I was hoping you would respond!

How about carpet cleaning? It would be soley for the benefit of the daycare, but I cant help but walk on it...

[TomCopeland]

carpet cleaning

Carpet cleaning for rugs that you also walk on for personal purposes in the evening and weekends is a shared expense (use your time-space %).

[TGT09]

Carpet cleaning for rugs that you also walk on for personal purposes in the evening and weekends is a shared expense (use your time-space %).

Could you go over calculating the time-space%?? I don't have to be licensed, therefore I don't already know this amount.

[mac60]

As a provider, there are so many things I am forced to do that cost dollars, that I wouldn't be doing if I wasn't doing daycare. Seems like the whole system is not too fair. For example, my carpet, yes I walk on it, but if a daycare kid pukes on it and I have to pay to have it professionally cleaned, doesn't seem quite fair I can only deduct a % of the cleaning cost. It wouldn't of had to have it cleaned if the daycare kid wouldn't of puked on it. This is what I mean by not quite fair. There are lots of other examples that could be used too. I am on my 3rd area rug in front of my front door to protect my carpet....parents with greasy/dirty shoes ruining my carpet so I started keeping an area run in front of the door, and parents greasy shoes have ruined 2 so far. If it wasn't for people coming into my daycare, I would not have the area rug down.

[legomom922]

Could you go over calculating the time-space%?? I don't have to be licensed, therefore I don't already know this amount.

You don't have to be liscensed for this. It's a formula that is figured by the amount of time you have DCK's in your home and the sq ft of your home that is used for DC. If you have MMK, you can enter all the info in there, and it will give you your time/space %.

[legomom922]

As a provider, there are so many things I am forced to do that cost dollars, that I wouldn't be doing if I wasn't doing daycare. Seems like the whole system is not too fair. For example, my carpet, yes I walk on it, but if a daycare kid pukes on it and I have to pay to have it professionally cleaned, doesn't seem quite fair I can only deduct a % of the cleaning cost. It wouldn't of had to have it cleaned if the daycare kid wouldn't of puked on it. This is what I mean by not quite fair. There are lots of other examples that could be used too. I am on my 3rd area rug in front of my front door to protect my carpet....parents with greasy/dirty shoes ruining my carpet so I started keeping an area run in front of the door, and parents greasy shoes have ruined 2 so far. If it wasn't for people coming into my daycare, I would not have the area rug down.

In this case, I would probably use the % that the item is used for business purposes, so that throw rug may be like 90%? Or I suppose if you took it off after DC hrs, it could then be 100% business.

I use those clorox wipes like crazy and even though I use them for personal, they are used MORE for business, so I claim those as being 90% business.

[mac60]

But that is not realistic to pull up an 5 x 7 area rug at 5:30 each day and put it down at 6:15 am again. Just where am I to take it. Bottom line, if I wasn't doing daycare I wouldn't be buying area rugs to protect my carpet from inconsiderate people. I am just stating a point that many things we do for daycare cost us lots of money, and if we were not doing daycare we wouldn't be doing these things. Seems these "things" should be 100% deductible. I have never understood and will never understand our tax system. It is a joke. And I find it quite amusing when I can call 3 tax people and get 3 different responses to a question. Just shows it is all in who you ask and what their rendition of the tax law is.

[Michael]

Could you go over calculating the time-space%?? I don't have to be licensed, therefore I don't already know this amount.

Here are some earlier posts on Time/Space %

https://www.daycare.com/forum/tags.php?tag=time+space+percentage

[legomom922]

Mac60: I agree with you 100%! Now rearding pulling up the rug..Everyday at 530 I take down all my pnp's, and put all daycare stuff away into my basement. Then at 6am I drag it all out again...so just taking up a rug, is alot more realistic to me than what I do everyday! LOL You have it easy!

[MyAngels]

Could you go over calculating the time-space%?? I don't have to be licensed, therefore I don't already know this amount.

This formula can be found on IRS form 8829 - Expenses for business use of your home.

[Former Teacher]

hmm I guess that means the new laptop I bought that I had planned on using as an expense doesn't cut it

What about things like computer paper/ink and everyday expenses that you use everyday for both personal and business? Does that mean I have to sit there and write about %'s ?

This is all new to me. When we filed our taxes last year, my current family took out all the taxes except federal. That being said, mom told me that I had to file federal. H and R Block told us that I can do self employed and pay my own taxes. Plus I can write off mileage ( I drive 90 miles each day total) plus any added expenses. Such as if I buy the children a toy or if I bought a package of crayons.

Speaking of the laptop, yes I would have bought it anyway. However I use the laptop from a business point because I research online for my curriculum. Plus I use the paper and ink to print up the lessons.

I am SO confused!! ::

[legomom922]

Yup!! You have to keep track of EACH expense and figure out if it is:
100% business
time/space %
or actual business %

It's not easy!!

The computer, paper and ink, you can write all of that off as time/space %.

I have another question for Tom:

My stepkids sleep in 1 BR 4 nights a month. I just re-decorated the room specifically for my DCK;s..My stepkids are 13 & 15, and I used a baby snoopy theme in the room, LOL, so these older kids are really not getting any benefit out of it at all. So I bought a border, and paint and brushes, and new snoopy curtains, and bedspreads for the bunks, where DCK could nap on. SO do write all of this stuff off as Time/space even though the DCK are here more and longer than stepkids? Or would it be 100% business because it is not benefitting my stepkids, or would it be like a 90% buisness expense?