Wednesday, March 25, 2009
2008 Tax Changes for Family Child Care Providers...
Since we are talking about taxes this week, I should share a few changes in the 2008 tax law that may affect child care providers. The following list if from Resources for Child Caring...
Standard Mileage Rate
The standard mileage rate for 2008 is 50.5 cents per business mile for January 1 through - June 30. The rate for the second half of the year is 58.5 cents.The rate for 2009 is 55 cents per mile.
Standard Meal Allowance Rate
The standard meal allowance rate for 2008 is $1.11 breakfast, $2.06 lunch/supper, and $.61 snack.
Special Bonus Depreciation Allowance
Providers can claim a 50 percent special depreciation allowance for property acquired and placed in service during 2008.
Eligible property must have a recovery period of 20 years or less.This includes: office equipment (computers, copies, printers, etc.), furniture, appliances, fences, play equipment, etc.It does not include home improvements or the home.
The original use of the property must begin with the provider in 2008 ("new" property).
Federal Minimum Wage
As of July 2008 the federal minimum wage rose to $6.55 per hour. In July2009 it will increase to $7.25 per hour. Providers who hire only one employee, or only hire family members, do not have to pay the federal minimum wage. Providers, however, may have to pay their state minimum wage.
The income limit to qualify for the IRA Saver's Credit has risen to $53,000 adjusted gross income for couples filing jointly; $39,750 for heads of household; $26,500 for individuals or married couples filing separately.
Just a few tips that may help you to save some money this tax season...
What I really want to know is... if a fine is a tax for doing wrong, is a tax a fine for doing well?
Since we are talking about taxes this week, I should share a few changes in the 2008 tax law that may affect child care providers. The following list if from Resources for Child Caring...
Standard Mileage Rate
The standard mileage rate for 2008 is 50.5 cents per business mile for January 1 through - June 30. The rate for the second half of the year is 58.5 cents.The rate for 2009 is 55 cents per mile.
Standard Meal Allowance Rate
The standard meal allowance rate for 2008 is $1.11 breakfast, $2.06 lunch/supper, and $.61 snack.
Special Bonus Depreciation Allowance
Providers can claim a 50 percent special depreciation allowance for property acquired and placed in service during 2008.
Eligible property must have a recovery period of 20 years or less.This includes: office equipment (computers, copies, printers, etc.), furniture, appliances, fences, play equipment, etc.It does not include home improvements or the home.
The original use of the property must begin with the provider in 2008 ("new" property).
Example - Family child care provider buys $2,000 of playground equipment
If it was used more than 50% in the business, provider can use Section 179
If it was used 40% for business:
$2,000 x 40% = $800 business basis
$800 x 50% = $400 - bonus depreciation on Form 4562
$800 x 50% = $400 - 7 year MACRS depreciation (14.29%) = $57.16 on Form 4562
Federal Minimum Wage
As of July 2008 the federal minimum wage rose to $6.55 per hour. In July2009 it will increase to $7.25 per hour. Providers who hire only one employee, or only hire family members, do not have to pay the federal minimum wage. Providers, however, may have to pay their state minimum wage.
The income limit to qualify for the IRA Saver's Credit has risen to $53,000 adjusted gross income for couples filing jointly; $39,750 for heads of household; $26,500 for individuals or married couples filing separately.
Just a few tips that may help you to save some money this tax season...
What I really want to know is... if a fine is a tax for doing wrong, is a tax a fine for doing well?
// posted by Tammy Wachter @ 6:56 AM 
