| If you are a Sole Proprietor who is running a | | | | would be 50 weeks x 40 hours for a total of |
| home daycare business, you are entitled to take | | | | 2,000 hours. |
| the home office deduction on Form 8829, | | | | If your schedule isn't that neat and tidy, you |
| Expenses for Business Use of Your Home. The | | | | should maintain a logbook to record the actual |
| starting point for this deduction is something called | | | | number of hours that you do daycare each day, |
| the "business use percentage." Read on to find | | | | and then add up the hours spent providing |
| out how to calculate this percentage and why is it | | | | daycare services for the entire year. |
| so important to do so. | | | | 2. Total hours your house was available for |
| The Calculation. Here's what you need to know to | | | | daycare use during the year. If you did daycare |
| calculate the business use percentage: | | | | for the entire year, you must use the default |
| 1. Actual number of hours your home was used | | | | amount provided on Form 8829, which for 2008 |
| for daycare during the year. If you offer daycare | | | | was 8,784 hours (366 x 24). |
| services about the same number of hours each | | | | Next, divide Item 1 into Item 2. In the example |
| week, this is an easy calculation. For example, if | | | | above, that would be 2,000 divided into 8,784, |
| you do daycare 8 hours a day, 5 days of week, | | | | which results in a business use percentage of |
| that would be 40 hours per week. If you took 2 | | | | 22.77%. |
| weeks off for vacation, your total annual hours | | | | |