Self employed end of year tax question?

Question

I have not been employed this year and I recently became certified to do home daycare through the state. It is already mid-september and if I do not get any children to take care of by the end of December can I still claim all the things I bought for the daycare? I have probably spent around $500 on things needed for it and I know I could get that all back on my taxes, but can I still if I do not end up with any kids to watch by 12-31 since I wouldn't have any income?

Answer 1

They are deductible but only after the business opens. You can deduct them in 2007 if you are open for business in 2007 and are looking for children in 2007.

Also, a $500 deduction doesn't mean you get $500 off your taxes. A $500 equates to $125 in taxes if you are in the 25% bracket or only $75 if you are in the 15% bracket.

Answer 2

You can "start" your fiscal tax year for income tax purposes on the first day of the month in which you made your first expense purchase. That gives you 12 months to earn some income against which you can deduct those expenses on Schedule C.

Fiscal year - A fiscal tax year is 12 consecutive months ending on the last day of any month except December. A 52-53-week tax year is a fiscal tax year that varies from 52 to 53 weeks but does not have to end on the last day of a month.

Answer 3

1. Pay your debts with a home equity loan, rather than by using credit cards:
Personal interest paid is not deductible, while interest paid on home equity loan may qualify as deductible.
2. Job-Hunting Expenses:
Even if you're working somewhere, and looking for another job, your job-hunting expenditure such as calls to recruiters, car driven can qualify as deductions.
3. Not only Medical expenses, but special equipments can also be deductible:
For example, if your doctor advised you to exercise on a routine basis, the cost of your treadmill or Exercise Machine may be tax deductible.
4. Your Computer and Internet connection may be Tax Deductible:
If you are an investor and use your computer for more than tracking a few stocks, the cost of your computer and internet connection (like AOL) can be tax deductible.

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