How to Project Profit/Taxes in the First Year?

[Max]

As a recent user put it - first time poster, long time lurker here

So here's where I'm at. I'm just starting out and I have a decent understanding of the different tax rules for deductions, what can be deducted, and how to calculate it, (Tom, if you read this, I can't thank you enough!) but I haven't made any purchases yet.. In addition to regular start up expenses, we are looking at purchasing a vehicle, fence, and having some new concrete poured. All for the sake of daycare.

I'm able to project my potential income, but having difficulty figuring out what my potential profit will be after costs and taxes.

My question is, how do I roll everything together? Is there anyplace where I could find examples of a first-year home daycare's taxes? Or any software that allows a 'dry-run' to estimate what my taxes will look like?

I worry that doing a simple equation such as "income - (costs + flat tax rate)" will not be very accurate and I don't want any surprises come tax time.

I know there are a lot of variables (spouse's withholding, new tax rules, etc.) but I'm a big planner and hoping to learn where I need to keep my costs at in order to get the profit I need. And also hoping to learn how all the tax rules work together to effect profit.

[Blackcat31]

As a recent user put it - first time poster, long time lurker here

So here's where I'm at. I'm just starting out and I have a decent understanding of the different tax rules for deductions, what can be deducted, and how to calculate it, (Tom, if you read this, I can't thank you enough!) but I haven't made any purchases yet.. In addition to regular start up expenses, we are looking at purchasing a vehicle, fence, and having some new concrete poured. All for the sake of daycare.

I'm able to project my potential income, but having difficulty figuring out what my potential profit will be after costs and taxes.

My question is, how do I roll everything together? Is there anyplace where I could find examples of a first-year home daycare's taxes? Or any software that allows a 'dry-run' to estimate what my taxes will look like?

I worry that doing a simple equation such as "income - (costs + flat tax rate)" will not be very accurate and I don't want any surprises come tax time.

I know there are a lot of variables (spouse's withholding, new tax rules, etc.) but I'm a big planner and hoping to learn where I need to keep my costs at in order to get the profit I need. And also hoping to learn how all the tax rules work together to effect profit.

I would suggest getting Tom's tax books. You can find them here: http://tomcopelandblog.com/toms-books

You can also learn a TON reading posts on his blog: http://tomcopelandblog.com/

[Max]

I would suggest getting Tom's tax books. You can find them here: http://tomcopelandblog.com/toms-books

You can also learn a TON reading posts on his blog: http://tomcopelandblog.com/

Oh I've read a ton of his blogs, I love them! Super helpful in learning exactly what all the rules mean. I thought about getting the 2015 Family Child Care Tax Workbook and Organizer to estimate my 2017 taxes and profit but I wasn't sure if that would be the correct tool for it... I may have to give it a try though. Thanks!

[TomCopeland]

taxes

Oh I've read a ton of his blogs, I love them! Super helpful in learning exactly what all the rules mean. I thought about getting the 2015 Family Child Care Tax Workbook and Organizer to estimate my 2017 taxes and profit but I wasn't sure if that would be the correct tool for it... I may have to give it a try though. Thanks!

You could use my 2015 Tax Workbook to estimate your 2016 taxes at this point. My 2016 Tax Workbook won't come out until January. If you used Turbo Tax or other online tax software last year you could replace your 2015 numbers with your 2016 numbers to get an estimate. It is difficult to get an exact estimate of your taxes with all the variables. If you tell me how much you estimate spending on a car, fence and concrete I can tell you the tax impact of these expenses.