UNDERSTANDING YOUR TIME/SPACE FORMULA
PART THREE- ARRIVING AT A FINAL PERCENT
Now that you have determined the portion of both time and space
which can be allocated to your home daycare business, you are ready
to compute your Time/Space formula. This will be accomplished by
multiplying the decimal amount you arrived at in determining TIME by
the percentage you arrived at by determining SPACE.
By applying the numbers that we have used in this three part tax
series, you arrive at 41.67% as a business use deduction. Please
refer to the example below:
SPACE .5150684 multiplied by TIME 80.90% equals 41.669033 percent
which is rounded to 41.67%.
This 41.67% would be multiplied against applicable indirect
expenses such as your home mortgage interest, property tax, and
electric bill. These expenses will help to reduce your taxable
income.
Brigitte A. Thompson (WAHM of Sarah 1/93 and Jacob 4/97)
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About the Author:
All articles ©Copyright 1999 Brigitte A. Thompson
Brigitte is the President of DATAMASTER, LLC and has been providing
accounting, bookkeeping, income tax and payroll services since 1992.
She has also operated a home daycare for years and has written a
book
for providers :
The Home Daycare Complete Record-keeping System
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