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Newark

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01/29/09 12:07pm PST
Viewed by asker 02/09/09 4:25pm PST

How to deduct home use family day care?

Client uses a potion of her home to provide day care. How to deduct home use portion?

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ZIPOTE

Contributor

01/29/09 12:43pm PST

schedule c line 30

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Accountant Man

Accountant Community AllStar

01/29/09 4:56pm PST

Sch C, Line 30 takes you to the 8829. There is a w/s for daycare home use, by hours as well as by square footage.

If you use Pro Series Basic I might not be able to help you. If you use Turbo Tax I might refuse to help you. All others, watch out! ;-)

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peterhawaii

Accountant Community AllStar

01/29/09 5:20pm PST

The solution

Form 8829 carries the home day care expenses to Line 30 of Schedule C. You might make a practice return and practice with this form. You need to fill in the day care center worksheet, and you should select the section which takes you take some areas exclusively (all the time) and some areas just during the business hours. A 10% area would be storage that you use regularly and exclusively for business every day of the year.

Down lower you can check to have you put in the total mortgage and property taxes and it will put the business portion on the Form 8829 carrying it to Schedule C and it will automatically transfer the property taxes and the mortgage interest to schedule A.

Then there are two columns for expenses Direct is the 100% business expenses for things you buy only for your business. The indirect column is for the expenses that you share as personal expenses and business expenses. You pay for electricity and this is an indirect expense where some is for business and some is for personal use.

I suggest you get Form 8829 Instructions and even read Pub 587 as being expert on this form can only save you dollars. You will find there many important things I have not covered.

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peterhawaii

Accountant Community AllStar

01/29/09 5:22pm PST

There are some minor typos I hope. Where it says 10% it should say 100%

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DCTAXPRO

New Member

02/06/09 3:51pm PST

Latest post

If you are referring to the business use of the home; you don't use a 'safe' number, you use the number of hours the family child care provider has worked in the home for business purposes. This does not necessarily refer to just the time children are present in the home. A family child care professional spends time related to business in her home when children are not present. Activities included could be, but are not limited to, cleaning the house for the business, preparing activities for the children, interviewing prospective parents, keeping business records, meal planning, spending time on the internet or computer for business, etc.

When calculating the space portion of the business use of the home, keep in mind the standard for claiming a room in the home as business use in family child care is 'regular use' NOT exclusive use. Counting rooms for business purposes is an important part of filling out Form 8829. What is the definition of regular use? A family child care professional who uses her master bedroom for the daycare children to take a 30 minute nap in each day is using the room regularly for business. A room does not have to be used every day to be considered to be used regularly. It is also important to note that it is not necessary for the daycare children to be present in a room for it to be used regularly for the business. A family childcare provider regularly uses her laundry room for her business (washing bedding, towels, etc) even though the kids are not usually allowed in a utility room.

It is not uncommon for a family child care provider to claim 100% of the rooms in their home for business.

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