Webinar Questions and Answers On “How to Reduce Your Taxes”

6a0133f3fc5805970b014e5f91d76f970c-320wiLast night I had a great time hosting a webinar “How to Reduce Your Taxes for 2010 and 2011” for a lively group of family child care providers from across the country.

If you didn’t have a chance to participate you can purchase a copy of the power point and audio of the webinar from the National Association for Family Child Care. They, along with daycare.com, sponsored the webinar. The cost is $29.95 if you want a CD of the webinar mailed to you or $15 if you want it sent via email for you to download. Call Tracy Halverson at 801-824-0098 or send a check made out to NAFCC, 1743 Alexander Street, Salt Lake City, UT 84119.

Participants at the webinar asked me numerous questions (68 in all!). There were so many I couldn’t answer them all last night. I’ve posted below all the questions and answers by topic: Starting Out, Food Expenses, Car Expenses, Phone Expenses, Energy Tax Credit, Depreciation, Other Expenses, Record Keeping, and Other.

Starting Out

Q: I received my tax ID number in 2010 but my first day of business was January 2011. Can I deduct items I bought for my business in 2010 on my 2010 tax return?

A: No. Since your business didn’t begin until 2011 you can’t claim any deductions in 2010. You will be able to claim these 2010 deductions on your 2011 tax return.

Q: Can I count the hours I spent setting up my home in 2010 even though I didn’t start my business until 2011?

A: No. Don’t start counting hours for purposes of calculating your time-space percentage until you start caring for children.

Q: My first day of business was January 15, 2010. Can I claim an entire year of mortgage interest, utilities, etc.?

A: Your time-space percentage will be slightly lower because you weren’t in business for two weeks out of the year. This lower percentage will be applied to the entire 12 months of your house expenses.

I’ve posted the rest of the questions and answers here.

Image credit: kernut.com

Categories: Starting Your Business

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