I made a little over $7000 doing in-home day care this year. Also my husband has a side job doing spray-in bedliners and powder-coating for cash, as this is considered a service and not a product so no tax was charged. Both of our home businesses spent more on equipment and supplies than we made this year. We made over $5000 renovations to our yard for my day care, built a pre-school classroom in our basement for over $3000 and purchased toys, tables and day care supplies for over $1000 plus more little expenses that add up. My husband bought a $1000 air compressor for his business and and bought/built a $1500 oven, plus overstock supplies for another $2000. Is is necessary to use Home & Business or is Deluxe sufficient enough to maximize our deductions?
I personally used the Home & Business last year as I’m an independent consultant for Longaberger. I’m really glad I used it because there were so many hints and deductions that I wasn’t aware of for my business including the electricity, phone lines, etc For the small amount of money that Home & Business costs compared to Deluxe, it was well worth it. I’ll be using it again this year!
If this is the first year you’ve had the day care and his side job, pay an enrolled agent to do your taxes. It’s a pain in the *** to figure out depreciation and you have to get this right or it comes back to haunt you.
Yes, you pay a little more, but then you’ve got a good tax return that you can use as a guide next year.
Stay away from turbotax at all costs; what you pay a tax preparer will be a fraction of what you save in taxes and get refunded as a result of doing it smart instead of on the cheap.
In your case I’d strongly recommend that you use the Home & Business version.
If you use Quicken or Quick Books, even better. The Home & Business version interfaces with both of those very nicely.