Last month I opened my own preschool last month and I have a question about taxes and write-offs... I was under the impression that ANYTHING related to my preschool could be written off so I have saved all of my receipts for supplies, construction of the school room, any changes we had to make for the licensing process etc. However, a friend of mine who does taxes (not ours) claims that a preschool/daycare is not a business that you can write off and asked me why I was going to even claim the income. Is this true?? I was under the impression that it is a small business and that everything could be written off and now I am a little stressed if this is not the case. Thank you!
She's an idiot. Look it up on the IRS website. There's a booklet you can order or download that tells a lot of it. I paid an accountant the first few years until I understood. Now I use turbo tax.
If you are licensed and registered than you are a business, but I am not sure what all expenses can be claimed.
SO many things can be written off. Time space percent of alot of it, like utility bills, etc, plus all of your direct daycare expenses and things like that. Tom Copeland is the expert on most things daycare. He is the one who fought for a Standard Meal Allowance deduction for us. Years ago we had to do all the food reciepts and seperate things from our family stuff and do the T/S% amounts..but now you can do actual food expenses or Standard Meal ALlowance. WAY EASIER!
Anyhow, here is his blog link..save it...read it, refer to it.
And find a tax person who specializes in the intricacies of home based childcare...that knows about simple terms like standard meal allowances, time space percentages, exclusive use rooms and more. If they don't, they can't maximaze your return and do not know what they are talking about for home based daycare business.
On the bottom right corner of his page is the link to the blog itself. He IS the leading expert on all things business related to home daycare. Lucky for me he is based out of my state!
Good luck!
Yes, she's an idiot... a lot of people who 'do' taxes took a course for a few weeks to work during tax season, it doesn't mean they know what they are talking about.
ask the daycare lady, she's a pro
http://www.thedaycarelady.com/form3.htm
They are wrong unless it is some California thing. In Oklahoma if you have a home child care business you can take a percentage of your home phone, cost of cleaning the carpet or furniture, electricity, natural gas, H/AC, etc...it is a huge part of the reason to have a professional do your taxes.
May I PLEASE recommend you find some kind of support group/providers group, I was part of our local Directors group, and you will be able to find out from them who does their taxes, who to avoid (pass the name of your friend in this category...LOL), and so many other things. They will be able to tell you which food program is the best, not all are equal or efficient, and so many other things. If they have staff looking for substitute hours, etc...it pays off in the long run to have a big network of support.
