Help Tom!

[bzzzybee]

I opened my daycare June 3, 2013. Prior to that I worked outside the home and my husband does as well. We decided to use a tax preparer to help us file this first year since they know daycare taxes. Anyway combined last year my husband and I made roughly over $64,000. I did not make any quarterly tax payments either. The tax preparer said I owe $14,255 in federal. Does this seem right to you? I do not think it should be that high!!!

I know this is probably difficult to assess with the little info I've given.

[ColorfulSunburst]

maybe it will help you a little

http://www.uft.org/files/attachments/provider-tax-guide-english.pdf

[TwinKristi]

Well I'm not Tom but I don't know how that's even possible. You can calculate a tax rate for that much income, especially if you worked a job that took taxes out, I can't imagine you having to pay so much! That's over a 20% tax... include anything you paid, deductions... yeah that's impossible! Even if you didn't pay a dime in taxes all year, there's a standard deduction...
I would find a new tax person!!

[bzzzybee]

Well apparently there was a software error and it was adding over $11,000 in taxes that I don't owe. That was good news, the disappointing thing is that it was caught because I said that sounded outrageous! Next year I'm doing my own taxes!

[TwinKristi]

Well apparently there was a software error and it was adding over $11,000 in taxes that I don't owe. That was good news, the disappointing thing is that it was caught because I said that sounded outrageous! Next year I'm doing my own taxes!

HA! Software error? LOL :: that's a good one! Imagine how many people just write a check and don't think twice when their tax prep says what they owe!

[bzzzybee]

HA! Software error? LOL :: that's a good one! Imagine how many people just write a check and don't think twice when their tax prep says what they owe!

Seriously!! I don't even know why it took me questioning it to make her double check what happened.

[daycare]

by any chance did you go to HR Block... my first year in DC I went there and they told me I was going to owe $9k.

I researched other CPA, talked to other providers in my area see who they used and went there. Got a refund of $800.00

[SilverSabre25]

I do my own taxes every year with TurboTax. easy peasy and it even remembers a lot of the info from year to year!! I do have to pay for Turbo Tax and use the business version (I just do it online) but you can have the payment deducted from your refund and your refund direct deposited so it doesn't matter. HIGHLY recommend. If you use Minute Menu Kids to keep track of stuff, then you're even MORE in the "easy peasy" place.

[bzzzybee]

by any chance did you go to HR Block... my first year in DC I went there and they told me I was going to owe $9k.

I researched other CPA, talked to other providers in my area see who they used and went there. Got a refund of $800.00

No, I found a place that the owner knows all about daycare taxes apparently (said she learned it after reading Toms stuff), however a different employee prepared ours and had never done daycare taxes before.

She just got back to me saying instead of owing a little over $1,400 in federal I now owe a little over $1,700 in federal because I can't depreciate appliances. Is this true? I bought my home in 2012 and the house came with the dishwasher and oven. I bought the microwave and fridge shortly after moving in. The fridge cost over $1,000 and the microwave was around $200 I believe. I was under the impression that they could be depreciated.

[TomCopeland]

depreciation

No, I found a place that the owner knows all about daycare taxes apparently (said she learned it after reading Toms stuff), however a different employee prepared ours and had never done daycare taxes before.

She just got back to me saying instead of owing a little over $1,400 in federal I now owe a little over $1,700 in federal because I can't depreciate appliances. Is this true? I bought my home in 2012 and the house came with the dishwasher and oven. I bought the microwave and fridge shortly after moving in. The fridge cost over $1,000 and the microwave was around $200 I believe. I was under the impression that they could be depreciated.

You are depreciating the dishwasher and oven as part of the cost of the home. Of course you can depreciate the fridge and microwave. If the microwave cost less than $200 you can deduct it in one year. Tell the taxpreparer to read the IRS Child Care Audit Techniques Guide: http://www.irs.gov/Businesses/Small-...echnique-Guide

[bzzzybee]

You are depreciating the dishwasher and oven as part of the cost of the home. Of course you can depreciate the fridge and microwave. If the microwave cost less than $200 you can deduct it in one year. Tell the taxpreparer to read the IRS Child Care Audit Techniques Guide: http://www.irs.gov/Businesses/Small-...echnique-Guide

I'll have to double check the price we paid for the microwave but if it's less than $200 I can deduct it now even though I bought it in 2012?

[TomCopeland]

microwave

I'll have to double check the price we paid for the microwave but if it's less than $200 I can deduct it now even though I bought it in 2012?

If you bought it in 2012, you should depreciate it. The $200 rule started in 2013.