If you are having seconds thoughts about opening your home daycare this may help you decide if you really want to open one. Opening your own home daycare can be rewarding, especially if you are great with kids and love taking care of them. You can provide this service for your friends and family and not only will you have helped them out; you would be earning some money as well. Home daycare centers often enjoy a lot of tax deductions assuming that you meet the IRS requirements.
Some of the requirements of the IRS for you to qualify are:
• Your daycare center must have clients
• You must have the necessary paperwork such as license and permits to operate
• You must pass all the requirements that the state requires to operate such as the building codes and safety and childcare codes.
Make sure that your license and permits are up to date and not expired or you can say goodbye to your much awaited tax deductions.
You may also not know that you can deduct your home space versus your business space. This simply means that the portion of your home that you use for your business can be declared as tax deductible. If you don't know how to do this, you can consult your accountant and have him help you out with your taxes. He or she is well trained to help you in matters like these.
Keep all your receipts that you use for your home daycare business. Some of these items are tax deductible and can save you some money. You can declare things that you use like laundry soap, diapers, toilet papers and even disposable spoons and forks. Any item you use for your daycare would most likely be included. Aside from this remodeling your house for your business can also be tax deductible. Often, renovations done for business are included in tax deductions. You may want to hold on to those receipts you use for the plumbing and other house repair that you have done. The money you save from taxes by declaring these things can help your other finances in keeping your daycare open. A lot of things in your business can be declared for tax deduction even services like cleaning.
Tax deductions can also apply to supplies and utilities. Children can consume a lot of water and electricity especially if you are taking care of a lot of them. The utilities and supplies that they consume or consumed by your daycare can be declared as tax deductible. You can get as much as 100% tax deduction on services that are acquired for your home daycare service.
These are just some of the things in your home daycare that can be considered as tax deductible. It would be a good idea to hire an accountant to handle your taxes so that you are sure that everything is done correctly and you can save money on your taxes.
For more:
How to start a daycare center by OwnADaycare.com
