Toys And Materials....Too Much?

[melskids]

It's great that you're organized and purchasing nice items. What is the star quality rating people are talking about?

here, in NY, from what i understand so far, is we are going to have a star rating, from 1 to 5, like a hotel or resteraunt. we get points based on education, our program, etc. the more points we have, the more stars we get. its supposed to show parents/prospective clients which programs are of higher quality. there are some things i dont like about the changes being made, but overall, i guess its going to be a good thing. its been alot of work though!!!

[TSDaycare]

My first year I took a $13000 loss! I think it's crazy but very valid-I worked a full time job until Sept, then started daycare and only had 3 children until January. I had been preparing to open a daycare since Feb of that year though-and used all my start up costs as deductions, there were some things we needed to do to our home that were required by licensing which were a little pricey-but those were 100% write-offs because they were "required", plus all my utilities,mileage,etc.

[Unregistered]

We are doing are taxes as well. Its my first year in daycare and I sarted in june 2010. I brought in 4500 and took a loss at 25,000. I assume it is ok because its my first year and doing all my inventory from coach to blinds to my diaper bag. Does bring in 10,000 back seem to less or to much for the first year. We have alot of space and electronics used in daycare.

[TomCopeland]

Too much?

A loss of $25,000 on $4,500 of income is a lot, even though it was your first year. It's true that most providers do have start up expenses that can create a loss. Because you have a loss you weren't entitled to claim any house expenses on Form 8829, but you can roll them over to 2011. As long as you kept good records of these expenses you can defend yourself.

[llove530]

What is you only make a profit of $163?

[TomCopeland]

Profit?

In general, a small profit attracts less attention. However, you should not be worrying about an audit. Instead, claim all reasonable expenses that you have receipts for and sleep well.

[llove530]

So what are the odds of an audit when someone makes so little money to begin with??

[TomCopeland]

Audit?

In general, self employed people run the risk of an audit about 2% of the time. I can't say if this goes up or down as your profit goes up or down.