If you had experienced taking care of the children of some of your relatives or friends and you feel that you enjoy the same, why not turn it into something that is profitable? Start your home day care center. It is a sure way of getting additional income.
Also, for people who are really planning to start a day care center and are confused on where to rent a space, they should look no further. Their homes can be a good location for their daycare center. You will not only save money on rent but you can avail of a lot of tax deductions if you use your home as the location of your daycare center.
To avail of tax deductions, the Internal Revenue Service has some basic requirements:
• Your daycare center must be taking in clients to care for. It should not just be a baby sitting chore done for some relatives or friends.
• Your daycare center must meet all of the state’s requirements and must be duly licensed. You must be sure that you renew your license every time because your deductions and benefits will end once it expires.
Once your daycare center starts using your home for its operation, you start becoming eligible for benefits or tax deductions you may never have heard of such as:
• The portion of your house that is used for your daycare business can be declared for tax deduction. The tax deduction is computed by getting the percentage of the floor area of your house that is utilized for your daycare center. Next step is to determine the number of hours that a portion of your house is used for the daycare center operation. Then determine the total household income multiplied by the percentage of footage of the house used for daycare multiplied by the number of hours such footage of the house is used for operations will be equal to the amount you can declare as tax deductions. This will be a significant benefit to your business if you maximized your tax deductions.
• Food and consumables used for your daycare operations can be tax deductible. Keep tab of your consumption of food items, diapers, toilet paper, table napkins, laundry soap, cleaning materials and similar products as long as they are used in the normal operations of your daycare center. Keep the receipts of these items so you can use them when you file for your income tax returns.
• Tax deductions are also granted on supplies and utilities. Giving care to children will include the use of water, electricity, and gas. All you need to do is determine the percentage of your utilities and supplies bill that are used for the normal day to day operation of your daycare center. You will get a 100% deduction if some utilities like telephone lines are exclusively installed for your daycare business.
• Any work done on your home for the purpose of the daycare operation can be tax deductible also. If remodeling or renovation is needed to be done to your house to accommodate the daycare center, it will fall under the tax deductible expenses. Just keep the receipts of all the remodeling and renovations done for your tax filing needs.
So instead of looking for a space to rent for your daycare center, utilizing your own home can bring you so many financial benefits. Just keep all the receipts!
For more:
How to start a daycare center by OwnADaycare.com
