February 1, 2010

Dear Friend,

I don't usually send out a mailing and then immediately follow up with another. This is a first.

I'm in your mailbox again because I learned something the other day that will affect most all family child care providers who plan to make use of either of the energy credits that were included in the American Recovery and Reinvestment Act.

This was an unexpected discovery made when doing research on the energy credits for a client. Unfortunately, these credits will be limited for day care providers with a time/space business percentage greater than 20% on their 8829 home expense form. That's most of you.

Read more if you made energy efficient improvements to your home in 2009 or plan to in 2010....such things as an efficient furnace, central air conditioner, windows, skylights, doors, insulation, asphalt/metal roofs, tankless water heaters, etc. Ask sellers of these products which ones qualify. You can still claim the credits, but it probably won't be for the maximum amount.

Sincerely,

While we're at it, here's another tax tip which may surprise you:

Fines and penalties paid to governmental entities are not deductible as a business expense.

Many child care providers assume that fines from licensing authorities for violations are deductible on their income tax return, but they are not. Neither are parking tickets or tax penalties.