How do you actually start claiming a daycare tax deduction? Although you already have your children to take care of, you still decided on helping other parents and guardians out there to take care of their child or children in order for you to earn your income. Simply put, you have decided to run your own home daycare center at the comfort of your very home. Good news is, you can apply daycare tax deduction on your taxes because of your home business. Here are some suggestions that can help get you started.
One of the most important things that you need to know is that there are certain qualifications that are required in order for you to have a daycare tax deduction. In order to properly qualify you must be correctly certified or have valid exemptions. Obviously if you do not have these or your license has been revoked or rejected for any reason whatsoever, you are automatically disqualified for this exemption and cannot legally apply for a daycare tax deduction or exemption.
There are other important factors that you need to be aware of in order for you to be able to calculate how much you can correctly deduct and use when it comes to qualifying for a daycare tax exemption. Anything related to the facility, in this instance your house that you used to run the daycare could be included. However, in order to calculate this properly you need to figure out what portion you use for business and what is used for living expenses. In this way you can use a portion of the amount you pay on your general bills, such as electricity, that may be employed in running your daycare. Only the amount used when running the daycare can be used to qualify for the daycare tax exemption.
Also included in expenses that can be claimed are the food you feed the children or any or all of your employees with. In fact you can deduct 100% of the employees’ meals and use this as part of the calculation for the daycare tax deduction. Of course this is to say that their salary or wages don’t already have a food allowance included in them. There needs to be careful records in order to use these amounts for the daycare tax deduction. It may be easier to keep a standard rate for all meals and snacks provided as part of the daycare. You can use this up to three snacks a day, beverages and three meals, but you cannot include any non-food items used to prepare the meal.
In the end, running a daycare center at your own home isn’t at all bad. By taking advantage of the daycare tax deduction you actually gain far more benefits from running the daycare in your own residence. In addition, with careful calculations and a little extra work, you can make the daycare tax deduction work the best for you as it possibly can.
No related posts.