Deducting your expenses as a home-based childcare provider can save you a lot of money at tax time. Unfortunately, more than 70% of providers are missing out on deductions and savings, according to this article.
The reason is many home daycares don’t calculate their Time-Space Percentage accurately. Your Time-Space Percentage (T/S%) is the single most important number to accurately calculate for your tax return, as our now-retired friend and business expert Tom Copeland puts it.
Your T/S% represents the proportion of your home that is used for business purposes. And it is the key to unlocking how much of your shared business and personal expenses can be deducted on your tax return, such as home and land improvements, depreciation, mortgage interest, utilities, rent, cleaning supplies, toys, and much more.
Thanks to Tom, we were able to draw insights from his wildly popular blog to bring you this guide. So let’s dive in!
Just looking at the name, you know it has something to do with your Time and your Space. It does. When you multiply your Time Percent and your Space Percent, you get your T/S%.
Here’s the formula:
Exclusive Space Percent + (Regular Use Area Space Percent X Time Percent) = Time/Space Percent
As you can see, before you can figure out your T/S%, you need to determine your Time and Space percentages. Once you have those, your T/S% is a piece of cake.
Do you have a room or space in your home that is used exclusively for your daycare? If not, use ‘0’ in the equation. You can also skip to Step 1 – Determine Your Time Percent.
If you do have a room or any space in your house that is used exclusively for your home daycare and never, not even once, used by you or your family for personal reasons, you can take advantage of the exclusive use room rule to increase your T/S%.
Your Time Percent represents the percentage of hours you work in a year.
Your Regular Use Space Percent represents the number of square feet in your home used on a regular basis for business.
This is the easy part. Take your Time Percent and multiply it by your Space Percent. If you had Exclusive Space Percent, add it to the result like this:
While your T/S% is the most important calculation for your taxes, having an accurate and complete record of your home expenses comes in a close second. Not only will it help you maximize your tax deductions, it will also help you budget for the future.
A convenient way to keep track of your expenses is to use software designed especially for home childcare businesses. With KidKare Accounting, for example, you can track all your expenses, calculate your T/S%, manage invoices and income, and offer families a way to pay online automatically with credit cards. To learn more and start a free, 30- day trial, click here.
Tom Copeland’s book Family Child Care Record Keeping Guide includes a comprehensive chapter on how to calculate your T/S%.
2. Click on “I need a new Password” in the bottom right as shown in the image below.
3. Enter your email address into the email field and then click on “Send Me”
4. This should send an email to the email address entered from KidKare Enrollment Portal with a link to reset your password. Click on the blue link
5. Enter your new password into the fields below and click “Go”
6. Now you can go back to the login page and login with your email as the username and your new password!
Follow the instructions below to download and install Minute Menu CX. You can install Minute Menu CX on as
many computers you need. The same link provided in this article can also be used by centers to install their
version of the software. For system requirements, see System Requirements.
1. Click here to download Minute Menu CX.
2. Depending on your browser settings, the file downloads automatically, or you are prompted to save or run it.
3. The installation wizard opens. Click Next and follow the on-screen prompts to complete installation. We strongly recommend that you install Minute Menu CX in the default location and that you do not change any of the options during installation.
4. Once the installation process is complete, click Finish. Minute Menu CX opens automatically, and you are prompted for your password.
5. Enter your user name and password. You should have received this information from Minute Menu or (centers) from your food program sponsor’s main office.
6. Click Login.
To access Minute Menu CX in the future, double-click on your desktop. You are prompted for login information each time, unless you check the Remember Login and Password box when logging in.
To see which version of Minute Menu CX is installed on your machine:
1. Open Minute Menu CX.
2. Click the Help menu and select About Minute Menu CX. The About Minute Menu CX dialog box opens. The version number displays at the top.
To upgrade Minute Menu CX:
1. Open Minute Menu CX.
2. Click the Administration menu and select Upgrade Software. The installation wizard opens.
3. Follow the on-screen prompts to install the upgrade. Note that you must upgrade CX on each individual machine on which it is installed.
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