Tax Tip Number Three

Hello again! It is time for this week's tax tip for child care providers! I hope these tax tips have been helpful to you! This week I want to address business expenses, specifically expenses related to running a business out of your home. As a daycare provider you probably use a significant portion of your home in some way to support your child care business. Because of that you have a lot of deductions you can take on your business taxes that you may not have thought about. For examples, did you know that you can deduct a portion of your electric bills? Since a portion of your electricity is used to support your business, you can claim this portion as a business expense. You will need to apply the time/space formula to your total electric bill for the entire year in order to find out what percentage you can claim as a business expense. For more information on the time/space formula scroll down to my article regarding important tax deductions for child care providers. You can also deduct a portion of your natural gas or propane bills (or whatever you use to heat your house), your cable TV or satellite TV bills, your garbage service and/or recycling bills, and services performed on your home. All of these would again have to have the time/space formula applied to them in order to find out how much you can claim as a business expense. Also, if you use yor computer for child care, specifically your internet service, a portion of your internet service provider fees is also deductible. All of these expenses are increased because you have extra people in your home for child care, so all of these expenses can be partially deducted for your business. If you have a phone line that is specifically used for your business, that expense is 100% deductible. Take the time to gather some information on your utility bills, etc. and apply the time/space formula to them. Then pass that information along to your accountant. These savings can really add up! For more information on tax savings for small businesses, check out this great info! Click Here!