As another alternative, or if you're thinking twice about leasing or renting a space, you can run your very own home day care center.
If you're such a great babysitter that your friends and relatives have taken to regularly leaving their kids with you, why not start your own home day care center? Not only will you be doing something you love, but you'll be making a lot of money on the side too.
Home day care centers enjoy lots of tax deductions and here's a small guide that you can use to see how you can benefit for home day care tax deductions if you meet the IRS requirements.
The requirements are the following, basically.
You must be a day care center taking care of clients.
You must have a license and meet all of your state requirements.
Once your license has expired or is revoked, so are your nifty tax bennies.
Once your business is on its feet (or even during the times that you're just setting it up) using your home as a day care has its own list of benefits.
Here are some tax deductions that you may have not known about: Deduct your home space vs.
business space.
What? This may sound like a lot of math but it's actually easy.
Whatever portion of your home you use for day care can be declared for tax deductions, just follow this simple formula: Total sq.
footage of your home you use for your daycare = % used for daycare Total sq.
footage of your home If you operate your day care center from 9 am to 5 pm, follow this formula to determine how much of your daily hours rate as business hours.
Total hrs used for day care = number of hours you use run your business 8760 hrs (8764 on leap years) Finally: Your total household income x % of footage used for daycare x number of hours = amount you can declare as a tax deductions.
Sounds bit complicated? Not at all.
It's simple math that you can use to gain maximum tax benefits for your business.
You can also deduct food and consumables.
Keeping your receipts-and knowing what items to declare can help you save on expenses.
You can declare anything that you use-consumables like toilet paper, laundry soap, and your microfiber diapers, even something as basic as table napkins.
As long as you use them for your day care business, you're set.
Simply multiply your expenses against the formula above to get a final number.
You can also get tax deductions on supplies and utilities.
Having children around is bound to consume more water and electricity.
All the services you use for your day care can be declared.
Just multiply the total amount you spend in a year by our trusty formula above.
If you have a separate line installed for your day care business (for example, a secondary phone line only used for your day care needs), you can actually get as much as a 100% deduction.
This applies to any of all services installed exclusively for your day care business.
Finally, you can declare work done on home services.
Any renovation or remodeling done for the business can be declared as a tax deduction.
Save all of your receipts for basic things like plumbing or house repair.
One of your clients destroyed your wallpaper? You can declare it and use it to float your expenses.
You can also declare other services like cleaning.
This is one of the great advantages of running a day care center from your home space.
It gives you a much needed buffer from taxes.
Knowledge is power or in this case, knowledge is money.
Spending a little time calculating during tax season can give you many happy returns and relief from future problems.
Just remember to save all those receipts! Learn more: Start a daycare business
If you're such a great babysitter that your friends and relatives have taken to regularly leaving their kids with you, why not start your own home day care center? Not only will you be doing something you love, but you'll be making a lot of money on the side too.
Home day care centers enjoy lots of tax deductions and here's a small guide that you can use to see how you can benefit for home day care tax deductions if you meet the IRS requirements.
The requirements are the following, basically.
You must be a day care center taking care of clients.
You must have a license and meet all of your state requirements.
Once your license has expired or is revoked, so are your nifty tax bennies.
Once your business is on its feet (or even during the times that you're just setting it up) using your home as a day care has its own list of benefits.
Here are some tax deductions that you may have not known about: Deduct your home space vs.
business space.
What? This may sound like a lot of math but it's actually easy.
Whatever portion of your home you use for day care can be declared for tax deductions, just follow this simple formula: Total sq.
footage of your home you use for your daycare = % used for daycare Total sq.
footage of your home If you operate your day care center from 9 am to 5 pm, follow this formula to determine how much of your daily hours rate as business hours.
Total hrs used for day care = number of hours you use run your business 8760 hrs (8764 on leap years) Finally: Your total household income x % of footage used for daycare x number of hours = amount you can declare as a tax deductions.
Sounds bit complicated? Not at all.
It's simple math that you can use to gain maximum tax benefits for your business.
You can also deduct food and consumables.
Keeping your receipts-and knowing what items to declare can help you save on expenses.
You can declare anything that you use-consumables like toilet paper, laundry soap, and your microfiber diapers, even something as basic as table napkins.
As long as you use them for your day care business, you're set.
Simply multiply your expenses against the formula above to get a final number.
You can also get tax deductions on supplies and utilities.
Having children around is bound to consume more water and electricity.
All the services you use for your day care can be declared.
Just multiply the total amount you spend in a year by our trusty formula above.
If you have a separate line installed for your day care business (for example, a secondary phone line only used for your day care needs), you can actually get as much as a 100% deduction.
This applies to any of all services installed exclusively for your day care business.
Finally, you can declare work done on home services.
Any renovation or remodeling done for the business can be declared as a tax deduction.
Save all of your receipts for basic things like plumbing or house repair.
One of your clients destroyed your wallpaper? You can declare it and use it to float your expenses.
You can also declare other services like cleaning.
This is one of the great advantages of running a day care center from your home space.
It gives you a much needed buffer from taxes.
Knowledge is power or in this case, knowledge is money.
Spending a little time calculating during tax season can give you many happy returns and relief from future problems.
Just remember to save all those receipts! Learn more: Start a daycare business