Instructions For Schedule C 1040 - 2016 (Page 12 of 18) in pdf

Keep for Your Records

Daycare Facility Worksheet (for simplified method)

1. Multiply days used for daycare during the year by hours used per day

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.

2. Total hours available for use during the year. See Instructions for the Daycare Facility Worksheet

. . . . . . . . . . . . . . . . . 2.

3. Divide line 1 by line 2. Enter the result as a decimal amount here and on line 3b of the Simplified Method

Worksheet . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.

Instructions for the Daycare Facility Worksheet

Use this worksheet to figure the percentage to use on line 3b of the Simplified Method Worksheet. If you do not use the area of your home exclusively for daycare, you

must reduce the prescribed rate before figuring your deduction using the simplified method.

If you used at least 300 square feet for daycare regularly and exclusively during the year, then you do not need to complete this worksheet. This worksheet is

TIP

only needed if you did not use the allowable area exclusively for daycare.

Line 1. Enter the total number of hours the facility was used for daycare during the year.

Example. Your home is used Monday through Friday for 12 hours per day for 250 days during the year. It is also used on 50 Saturdays for 8 hours a day. Enter 3,400 hours

on line 4 (3,000 hours for weekdays plus 400 hours for Saturdays).

Line 2. If you used your home for daycare during the entire year, multiply 365 days (366 for a leap year) by 24 hours, and enter the result.

If you started or stopped using your home for daycare during the year, you must prorate the number of hours based on the number of days the home was available for

daycare. Multiply 24 hours by the number of days available and enter that result.

Using Form 8829. Use Form 8829

manner. If divided evenly, Kristen could

for August through December divided

to figure and claim this deduction for a

claim 250 square feet using the simpli-

by the number of months in the year ((0

home if you are not or cannot use the

fied method and Lindsey could claim

+ 0 + 0 + 0 + 0 + 0 + 0 + 300 + 300 +

simplified method for that home. For in-

150 square feet.

300 + 300 + 300)/12)).

formation about claiming this deduction

Partyear use or area changes (for

Example 2. Roland files his federal

using Form 8829, see the Instructions

simplified method only). If your quali-

income tax return on a calendar year ba-

for Form 8829 and Pub. 587.

fied business use was for a portion of the

sis. On April 20, he began using 100

Using the simplified method. Use

tax year (for example, a seasonal busi-

square feet of his home for a qualified

the Simplified Method Worksheet in

ness, a business that begins during the

business use. On August 5, he expanded

these instructions to figure your deduc-

year, or you moved during the year) or

the area of his qualified business use to

tion for a qualified business use of your

you changed the square footage of your

350 square feet. Roland continued to use

home if you are electing to use the sim-

qualified business use, your deduction is

the 350 square feet until the end of the

plified method for that home.

limited to the average monthly allowa-

year. Roland's average monthly allowa-

ble square footage. You figure the aver-

ble square footage is 150 square feet

Shared use (for simplified method

age monthly allowable square footage

(100 square feet for May through July

only). If you share your home with

by adding the amount of allowable

and 300 square feet for August through

someone else who uses the home for a

square feet you used in each month and

December divided by the number of

separate business that also qualifies for

dividing the sum by 12.

months in the year ((0 + 0 + 0 + 0 + 100

this deduction, you may not include the

+ 100 +100 + 300 + 300 + 300 + 300 +

When

determining

the

average

same square feet to figure your deduc-

300)/12)).

monthly allowable square footage, you

tion as the other person. You must allo-

cannot take more than 300 square feet

cate the shared space between you and

Example 3. Donna files her federal

into account for any one month. Addi-

the other person in a reasonable manner.

income tax return on a calendar year ba-

tionally, if your qualified business use

sis. From January 1 through July 16 she

Example. Kristen and Lindsey are

was less than 15 days in a month, you

used 300 square feet of her home for a

roommates. Kristen uses 300 square feet

must use -0- for that month.

qualified business use. On July 17, Don-

of their home for a qualified business

na moved to a new home and immedi-

Example 1. Andy files his federal in-

use. Lindsey uses 200 square feet of

ately began using 200 square feet of the

come tax return on a calendar year basis.

their home for a separate qualified busi-

new home for the same qualified busi-

On July 20, he began using 400 square

ness use. The qualified business uses

ness use. While preparing her tax return,

feet of his home for a qualified business

share 100 square feet. In addition to the

Donna used the simplified method to de-

use. He continued to use the 400 square

portion that they do not share, Kristen

duct expenses for the qualified business

feet until the end of the year. Andy's

and Lindsey can both claim 50 of the

use of her old home. Donna's average

average monthly allowable square foot-

100 square feet or divide the 100 square

monthly allowable square footage is 175

age is 125 square feet (300 square feet

feet between them in any reasonable

C-12

Instructions For Schedule C 1040 - 2016 Page 12

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