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Help! I am stressing about taxes myself and a friend opened our business in June and created a partnership so we need to file a 1065. How do we know how to fill it out to get our max deductions based on running an in home daycare. Can we use the business turbo tax?
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partnership
Turbo Tax won't help you file Form 1065 as a partnership. You can claim the same deductions as a partnership as a sole proprietor (self employed), with a big exception. The partnership can't claim home expenses. The partnership can pay rent to the owner of the home and deduct this as a partnership expense. The home owner must report this as income on Schedule E. The homeowner can then claim house expenses on Schedule E, but cannot claim any house depreciation as an expense. This is a loss of a big deduction.
I usually never recommend that providers form a partnership, because of the complications of a partnership (and the loss of house depreciation). The best way to go is for the homeowner to hire the other person as her employee.
See more info on this: http://www.tomcopelandblog.com/2011/...rtnership.html
Don’t miss my February 4th webinar “Tax Changes for 2013: How to Avoid Mistakes When Filling Out Your 2013 Tax Forms.” It starts at 9pm Eastern Time and is sponsored by Daycare.com. Register here: http://events.r20.constantcontact.co...&llr=yatrx4cab
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