Rough Year in Daycare Land

[Oats&Ivy]

So, in summary, last year was rough in terms of consistent enrollment. I'd have kids come for 2 months, then nothing for a month, kids for 2 months, then nothing. I contribute it to a rough split with my ex, and a sudden move to a not so great neighborhood. We've since moved again, and thankfully things are looking to be on the up.

Now my question is this, since I had such spotty enrollment, my income is very, VERY low. I basically was only able to survive by saving every penny I received, plus my income taxes from last year. Would it be more wise to use time/space percentage for the entire year (smaller %) and enter in ALL of my expenses, even though no daycare kids were there, or use a higher time space percentage (for only the months the kids were there) and only enter in the expenses when children were present. I obviously want to maximize my refund, so want to do what would yield the best results. (OBVIOUSLY, I want to make sure it is the RIGHT way, foremost!)

Hope I explained that clearly enough. I appreciate any help anyone can provide!

ETA:

I have a couple more questions. Since last year I moved, for my space % do I calculate the average of the space I used for the daycare. For example, one house I used 83% and the other used 80%. So should I use the average between them?

Also, I received an energy assistance grant. So do I enter in my bills regularly, then under "other income" do I add in the grant amount?

[Oats&Ivy]

Bump. Anyone?

[Blackcat31]

Welcome to the forum!

We have a resident tax guy that answers the tax questions posted so I am sure as soon as he sees this thread, he'll have an answer for you.

In the mean time, I just wanted to say welcome!

[TwinKristi]

It also depends on your income. Last year was my first year filing taxes as a provider and I entered in all my income and my expenses/deductions and the more I entered the lower my refund got (through Turbo Tax Home & Business) and I finally removed all my expenses and my refund was higher! I was right on the cusp of a bracket and did better only entering my income, by thousands of dollars! So you may want to play around with numbers and see what works best for you.

[TomCopeland]

Time-space

So, in summary, last year was rough in terms of consistent enrollment. I'd have kids come for 2 months, then nothing for a month, kids for 2 months, then nothing. I contribute it to a rough split with my ex, and a sudden move to a not so great neighborhood. We've since moved again, and thankfully things are looking to be on the up.

Now my question is this, since I had such spotty enrollment, my income is very, VERY low. I basically was only able to survive by saving every penny I received, plus my income taxes from last year. Would it be more wise to use time/space percentage for the entire year (smaller %) and enter in ALL of my expenses, even though no daycare kids were there, or use a higher time space percentage (for only the months the kids were there) and only enter in the expenses when children were present. I obviously want to maximize my refund, so want to do what would yield the best results. (OBVIOUSLY, I want to make sure it is the RIGHT way, foremost!)

Hope I explained that clearly enough. I appreciate any help anyone can provide!

ETA:

I have a couple more questions. Since last year I moved, for my space % do I calculate the average of the space I used for the daycare. For example, one house I used 83% and the other used 80%. So should I use the average between them?

Also, I received an energy assistance grant. So do I enter in my bills regularly, then under "other income" do I add in the grant amount?

I'd calculate your time-space % based on the months you were caring for children and use only those months of house expenses. If you did child care in two different houses in one year, you must fill out two Form 8829s and calculate a separate time-space % for each home and apply that to house expenses for each house. I assume your energy assistance grant was not related to you being a family child care provider. If so, enter the grant on Form 1040, line 21.

[LaLa1923]

It also depends on your income. Last year was my first year filing taxes as a provider and I entered in all my income and my expenses/deductions and the more I entered the lower my refund got (through Turbo Tax Home & Business) and I finally removed all my expenses and my refund was higher! I was right on the cusp of a bracket and did better only entering my income, by thousands of dollars! So you may want to play around with numbers and see what works best for you.

Tom..how is this possible?

[itlw8]

may I guess? you have to earn $5000 to get earned income credit so by taking expenses she did not make enough to get earned income credit. Did I get it right?

[TwinKristi]

I made about $10,000 that year from May to Dec (3 PT families) so it was right on the cusp of the EIC max, the more I made the less EIC I got and the less I made the more EIC I got. EIC works on a scale from low to high to low again. I was right at the peak.