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i just finished adding up my deductions, and holy cow, i spent ALOT on toys!!!! granted, they are changing to a star quality rating, and expect me to have all of the things i purchased, so its not like i didnt really need it. so what i'm wondering is, i have just over 20,000 in income. is it too much to expect $2400 in toy purchases to sound O.K.? thats not even including curriculum, or the toy shelves i bought!!!!
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I think that's extremely reasonable! Especially considering what you said about the star quality rating and that you really need those supplies. I don't think that's unreasonable at all.
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LOL ummmm ..... I have over 20,000 in deductions for 2010 so no I don't think that's too much
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holy cow! i hope someday i'll make enough $$ to have that many deductions!!!!Originally posted by AmandasFCC View PostLOL ummmm ..... I have over 20,000 in deductions for 2010 so no I don't think that's too much
i get a little nervous cause the deductons look like so much, i dont want to cause the IRS to question me, you know? but you dont realize just how much you spend until you add it all up. i spent another $600 just on plastic totes, tubs, bins, and a nice wood shelf for toys, just to organize everything.Comment
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Too much?
No, your toy expenses are not too much. Keep records about your star quality rating. That helps support your deduction. Don't worry about this if you have the receipts or other records to back up your deductions.Comment
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thanks Tom!
yes, i keep all my receipts for everything!! when all is said and done, it just looks like i spent SO MUCH!!! which, i did...
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What happens if what I end up deducting total from the house to the toys to the car exceeds what I made last year because I was preparing for the business but didnt get a client till half way in the year? It seems like I have a lot to deduct and might have purchased what income I made to a "T" if not beyond? Im a avid receipt saver and saved ALL of them this year as well as wrote down everything in my keeper and kept track of all mileage etc...
Will the IRS get on me because say I only made $4000.00 but with everything I wrote down to write off will be the $4000.00 or more?
Excuse me if this sounds all "duhh" as I have NO CLUE what will go on or what is going on. I just knew to keep receipts and write everything I did from the laundry to trips to the zoo down."Being a parent is wanting to hug and strangle your kid at the same time".Comment
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I think it's well understood that people might/will take a loss their first year or two or three in business. This is just my own opinion, but I think it's fine if you have to take a loss this year...Originally posted by Erin's Daycare View PostComment
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Too much?
I wouldn't worry about showing a loss in your first year. It's reasonable. When you are filling out Form 8829 and claiming house expenses, you won't be able to create a loss or increase a loss because of these house expenses. Therefore, the form will tell you to carry over some of these house expenses into 2011 where you may be able to deduct them.Comment
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It's great that you're organized and purchasing nice items. What is the star quality rating people are talking about?Originally posted by melskids View Post
I wouldn't be concerned because it's a smaller dollar amount for income. I would have red flags if you earned $20,000 and spent $30,000 Get what I mean? I hope you can get more enrolled so you can increase your income.Originally posted by E Daycare View PostLast edited by Abigail; 01-19-2011, 12:23 PM.Comment
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Id LOVE to make anywhere near 20k. Or 10k for that matterOriginally posted by Abigail View Post. I get what you're saying though. So far the year looks promising as I have one full timer (but is on a discount because of the yada yada "cant afford your full rate" bologna) and a part timer. So I *gasp* stand to pull in maybe 10k this year! Bling bling.
"Being a parent is wanting to hug and strangle your kid at the same time".Comment
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I completely understand. In general (not child care field), but every year I have been slowly increasing my income but this year I'm going to take a big hit because I quit a long-term job and couldn't find anything decent. So now I'm working a new job along with a part time daycare job so we have a good work history to get a home loan so I can start daycare. At least 2010 is over and I'm working a regular 30+ hours from here on out. Well, until we buy a house then I'll start daycare right away!Originally posted by E Daycare View PostId LOVE to make anywhere near 20k. Or 10k for that matter. I get what you're saying though. So far the year looks promising as I have one full timer (but is on a discount because of the yada yada "cant afford your full rate" bologna) and a part timer. So I *gasp* stand to pull in maybe 10k this year! Bling bling.
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What if every year is a loss?Comment
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Loss
IRS rules say that if you show a loss three or more years out of every five years you are more likely to be audited because the IRS may think that you are not trying to make a profit and therefore deny some of your deductions. I have seen providers get into trouble with the IRS because they had large losses (thousands of dollars) year after year. Try to show a profit three of every five years to reduce your chances of an audit.Comment
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I only made $5095 in 2010 and my deductions were $3600 or so...I was freaking out because after my deductions, mileage, and meals I had LOST $500, so I thought that uncle sam was going to come lock me up and call me a crook, but I was assured that the IRS expects you to take a loss during the first 2-3 years and that my loss is very much within the acceptable range given how little i earned
i'm still scared of the tax man thoughComment
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