Running a daycare is a rewarding job, but it can also be financially challenging. From toys and games to snacks and supplies, the list of necessary daycare expenses seems never-ending. Luckily, there are ways to save money as a daycare provider, including writing off certain expenses on your taxes. One question that many daycare providers often ask is whether they can write off purchases made on Facebook Marketplace on their taxes. In this blog post, we’ll answer that question with a resounding “yes” and explain how you can do it.
Can You Write Off Facebook Marketplace Purchases for Your Daycare Taxes? Yes, You Can. Here’s How
Proof Of Purchase
First of all, it’s important to note that you can write off any legitimate and necessary expense for your daycare on your taxes. This includes items purchased on Facebook Marketplace, as long as they are used for your daycare business. To ensure you have proof of purchase, take a screenshot of the ad. And keep any messages or conversations with the seller. This type of proof will help you confirm your purchase if you ever need to prove it to the IRS.
Transaction Statement or Handwritten Recipet
If you pay for the purchase via e-transfer, keep the detail page of your bank statement for the transaction. This statement will serve as proof of payment and help you make your case to the IRS or CRA. In addition, it’s always a good idea to have the seller sign a handwritten receipt confirming that you purchased the item from them. A receipt will provide additional proof of purchase and help you in the event of an audit.
Claim Only What You Use For Daycare
Another important thing to remember when writing off Facebook Marketplace purchases on your taxes is that you can only claim the amount of the purchase used for your daycare. For example, if you buy a toy for both your daycare and your personal use, you can only write off the percentage of the purchase used for your daycare. This means that you need to keep accurate records of which items you use solely for your daycare. And which ones you use for personal use as well.
Finally, it’s always a good idea to consult a tax professional or accountant to ensure you follow all the rules and regulations regarding tax write-offs for your daycare business. They can help you determine which expenses are legitimate and necessary and guide you on how to document and claim them on your taxes.
In conclusion, purchasing items on Facebook Marketplace can be a great way to save money on your daycare expenses. And the good news is that you can write off these purchases on your taxes as long as you have proof of purchase and demonstrate that the items are used for your daycare business. Remember to keep accurate records, consult a tax professional if needed, and always keep the IRS/CRA guidelines in mind. By following these simple tips, you can save money and ensure your daycare business runs smoothly and efficiently.