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Daycare and Taxes>Loss vs Refund
TSDaycare 06:12 PM 01-25-2011
So I'm confused- If I don't claim a loss-I wont get a refund? Im taxed on my income after expenses correct, I have alwyas been told if you don't claim a loss then you will owe. This is my second year in business, last year I did claim a loss, but was only in business 4 months out of the year. I did get a nice refund but I had worked full time until I opened my daycare and was having taxes taken out from that pay all year......
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TomCopeland 08:44 PM 01-25-2011
Whether or not you claim a loss doesn't have much to do with whether you get a refund or not. You only get a refund if you paid in more taxes than you owe. Maybe you have a loss, but you or your spouse paid in a lot of estimated taxes and thus get a big refund. But you could have a profit and still get a big refund because you had even more taxes paid in throughout the year.

If you have a business profit of $400 or more you will have to pay social security tax on this. Your goal should not be to get refunds and to keep your profit low enough to get the biggest refund possible. Your goal should be to claim all allowable business deductions and pay the least tax that you owe. You want to look at how much money you have left over after paying your taxes, not how much you paid in taxes. The more profit you make the more taxes you make, but the more you have after paying the taxes! Therefore, more profit is good! Don't focus on the taxes.
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TSDaycare 03:09 AM 01-26-2011
I haven't paid anything in taxes this year. I also don't expect to have a very big profit after expenses-should I expect to get anything back? The way I look at it-if I haven't paid anything in-I cant get anything back.......
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Jewels 03:57 AM 01-26-2011
I guess that would depend on if your single or married, ...........Heres what I'm guessing for myself for instance, I am thinking that when my husbands taxes are put in first by our tax guy, they will show hes getting back $2000 or so, and thats going to be with the child tax credits, our itemized deductions (mortgage interest, charitable donations, car tabs, Etc) and he gets a paycheck so has already payed into taxes....then when the tax guy inputs me, hes going to show a profit of well I'm hoping to get it down to $13000, which I think would put me with the 15.3%(sorry if I'm wring here) self emplyment tax, owing well $2000, and we will break even, and not recieve any money back or owe anything. so if your filing together, you could still get a refund on your spouses part, or if your single, you wouldn't get anything back, but if your profit is really low, you shouldn't owe in that much.....this year I am setting aside $400/month in savings for taxes for next year.
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TomCopeland 08:45 AM 01-26-2011
I still can't answer the question of whether or not you will get any money back because I don't have enough information. If you are married, you husband might have had a lot withheld and you could still get a lot of money back. If you are single and you have other tax credits you are eligible for you could get some money back. If you are single, didn't withhold any taxes, and have a small profit, and aren't eligible for tax credits, it's unlikely you will get any money back.
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Tags:expenses, refund
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