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Tax Deductions For Home Daycare Center

 

You know very well that you have to shell out some of your hard-earned money every time you have to file your tax returns for your business. What is not known to many tax payers is that there are many tax deductions out there that can lower the amount of tax that you have to pay the government.

The first thing to consider in filing your tax returns is to determine who will prepare your tax forms. You can do the preparation yourself, aided by some tax software programs or by making inquiries with the Internal Revenue Service, either through their website or over the phone. You will realize that it will be very easy to handle the preparation aspect of your tax returns to be filed. Another option is availing of the services of professional tax preparers, like H&R Block and many other professional tax service providers. While the service of professional tax preparers may cost a little bit more money than when you do it yourself, you will discover that they can find tax deductions for you that you are not aware of.

Many owners of home daycare centers are surprised to learn that mileage logged in the course of the operation of the business is tax deductible. One will be missing huge savings on taxes paid by not keeping track of mileage. Deductible mileage includes those logged for field trips or trainings and any other trip you made in relations to the operation of your daycare center. Every grocery trip to purchase food for the children, every trip to the bank to deposit checks paid by the parents of the children under your care, every trip to buy toys and supplies needed by the children are deductible mileage from your tax.

How can you claim mileage deduction if you failed to keep track of them? You can create your mileage log by reviewing every receipt that you kept, also for the purpose of tax deductions. Arrange the receipts by date then calculate the number of miles traveled from your house to the place where the receipt was issued and then back to your house again. If you are not sure of the actual distance covered by each trip, you can you MapQuest to establish the distance from your home to the store where you made the purchase. A 10,000 miles total can easily translate to between $3000 -$4000 deduction. It is not a small amount of money!

Another big tax deduction comes from the food supply you purchased for the children in your daycare center. You need to calculate the total expenses on food incurred by the daycare center for one whole year, separate from the personal consumption made by you and the members of your family.

These are only two examples of top deductibles that can give you tax savings. A lot more deductions can be availed of if only you know what are they. A tax professional can easily identify those tax deductions and help you prepare your tax documents. You will realize at the end that the amount you paid your tax professional will be worth the tax payments that you can save.

 
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