Conduct a Household Inventory to Save Money

6a0133f3fc5805970b014e8acf389a970d-120wiThere are thousands of dollars worth of tax deductions sitting in your family child care home, waiting for you to report them on your tax return.

These deductions are household items that you are using in your business. These include your washer, dryer, refrigerator, stove, television, beds, tables, chairs, lawn mower and snow blower. In addition to furniture and appliances, you can also include rugs, lamps, bedding, silverware, pots and pans, curtains, towels, tools, and so on.

Anything that you owned before you went into business that is now being used in your business can be claimed as a business expense by depreciating it.

Household items are depreciated over 7 years. If you are using these items for both business and personal use, apply your Time-Space Percentage before depreciating them.

If you are a new child care provider –

Conduct a household inventory of all household items by writing them down. This job can be made easier by using my Family Child Care Inventory-Keeper. It is an easy-to-use log that enables you to track your household items by room. In addition, take pictures of each room in your home (including your basement and garage).

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Categories: Deductions, Depreciation and Home, Record Keeping & Taxes

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12 replies

  1. So if I understood this right. I started opening my business in March of 2011 Actual first day with children was June 1st 2011. I can go through my house and just use an estimate and I will not need receipts? Do I need to document by taking pictures of the items or just the inventory list? Thank You!

  2. Yes, take an inventory and estimate the value of your household items as of June 1, 2011. If you have receipts, save them. Otherwise take pictures of the items.

  3. So I think I understand everything except valuation. So I started daycare in 2011, my wife has a laptop that she purchased in 2009, starting in 2011 we used the laptop for business. So I can depreciate the laptop on 2011 taxes even though I did not purchase it in 2011. Right?
    Okay, so what do I put for value? I have a receipt showing full purchase price in 2009, or do I use an estimated value of it in 2011?

  4. Yes, you start depreciating the laptop in 2011 based on what it was worth in 2011 when you started using it in your business. Estimate what a stranger would pay you for the computer in 2011. It’s a guess. It’s probably not worth more than half of what you paid for it.

  5. I just read this article, I did not do this when I first started my daycare a couple years ago can I do it now?

  6. Yes! Use IRS Form 3115 to claim depreciation deductions you were entitled to claim before 2012. See my article: http://www.tomcopelandblog.com/2011/09/how-experienced-providers-an-uncover-hidden-deductions-.html

  7. we use our house for daycare and added another bedroom and a dining room on. Both these rooms are used for daycare just like the rest of the house. Can we use the cost of the addition for a deduction.

  8. Yes. This is a home improvement that you must depreciate over 39 years after applying your time-space %.

  9. Do I add up all value prices of all of our household items we owned & place the total price under household items for getting depreciated? or I have to mention them one by one individually??

  10. I am in the process of purchasing a home before year end 2014; my small business was started in 2010; I have been using a public storage facility for my equipment (cleaning supplies, vacuum cleaners, rug shampooers, etc.) And a room in my apartment to do the paperwork i.e., invoices, accounts payables, etc. Will I be able to use 179 deductions for this for 2014? I will be storing cleaning items in the garage and will have a separate room as my office; how about the new appliances?

  11. I just started my daycare as of 5/8/2016 and have only one part time child as of August, but I’ve purchased more than 4,500 dollars in business start up supplies and furniture, can I file taxes to get some of my money spent back?

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