Anyone do daycare and can help with a tax ?

[princessh]

I have been doing daycare for over four years. I have a great accountant. However she keeps telling me that I can only claim a loss so many years and then must claim a profit so the IRS does not consider the daycare a hobby. When I first started doing daycare I took a class on record keeping and taxes. In the class the accountant who specializes in daycare said that daycares were the exception to the business profit status. My accountant has never heard of this. Of course, since it has been so many years since I took the class, I can not find the information on the accountant who taught the class. Does anyone know if th information that was given in the class is correct? I seem to remember daycares being the exception, because you can deduct so much more than you could from any other type of business done at home. Please help!

 

[Lynn CC]

I was a family daycare provider for 11 years, and my accountant was one for many years even while she was an accountant, so she specialized in taxes and seminars for family daycare providers. I could have sworn that she told me you can have a loss for 3 years then you have to show a profit or your not considered a business. I had a loss the first couple of years because I bought A LOT of Stuff (inside and outside) to start out, I even had the YMCA come in and give the kids private swimming lessons each summer. Perhaps your not charging enough to cover your expenses? I stopped my business 5 years ago, My first Daycare Child is a sophmore in college, she still keeps in touch!

 

[Bob Slydell]

I believe the number of years with a loss thing is a guideline more than a hard and fast rule:

http://www.irs.gov/businesses/small/article/0,,id=99239,00.html

Disclaimer: I don't know this for certain and I'm not a tax professional

 

[Maleficent13]

Disclaimer: I don't know this for certain and I'm not a tax professional

No, he's just the DIS tax guru!