If you have your own children to take good care of and for some reason you have decided to help other parents to take care of theirs too. You have decided to run a daycare service right in the comforts of your home. There is good news with this because you can apply for a daycare tax deduction on your taxes. Maybe you are asking how you get to start claiming a daycare tax deduction. The following are a few suggestions that would help get you started.
There are requirements for you to be considered as a daycare for you to qualify for the tax deduction. You must be correctly certified or have valid exemptions because obviously if you do not have these or your license has been revoked or rejected for any reason, you are no longer qualified for this exemption and cannot legally apply for a daycare tax deduction.
There are a few factors that you need to know before calculating how much you can deduct and correctly use them in qualifying for a daycare tax exemption. Any facilities that you use in running your daycare are included in the computation and one of this is your house. However, in order to calculate this properly you need to figure out what portion you used for business and what is used for your personal living expenses. In this way, you can use a portion of the amount you paid in your general bills, such as electricity, water, telephone and other bills that may be employed in running your daycare. Just be reminded that only the amount used when running the daycare can be used to qualify for the daycare tax exemption.
Included also in the expenses that can be claimed for tax exemption are the food you have used in the meals of the children and to your employees too (if there are). In fact you can deduct 100% to your tax the expenses on meals of your employees. It may be easier to keep a standard rate for all the meals and snacks provided in your daycare. You can use up to three snacks a day, beverages and three meals, but you cannot include any non-food items used to prepare the meals. Of course this is only good for employees that food allowance is not yet included in their salary or wages. You have to have a complete and updated record on these for you to avail the tax exemption. Bear in mind that personal expenses in your personal food nor your family are not included in the computation.
Therefore, at the end, you will think running your daycare in your own house is not a bad idea after all. You will realize that you can also gain many benefits from running your daycare in the comforts of your home and this is by taking advantage of the tax deduction. In addition, with the careful calculation and a little extra work, you will be amazed because you can make the daycare tax deduction possibly work best for you.
For more:
How to start a daycare center by OwnADaycare.com
