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Exclusive Use Rooms and |
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Exclusive use means a room is not used for personal use
Family child care providers who use one or more rooms in their home exclusively for their business should use this formula:
Space Percent of + Time/Space Percentage = Time/Space Percentage exclusive use rooms of rest of home of entire home |
Let’s use an example of a home with 2,000 square feet: one room of 100 square feet used 100% for business and the remaining 1,900 square feet used regularly for business use and personal use. The Time percent is 40%.
Step One: Divide the square feet of the exclusive use space by the total square feet.
200 = 10% Space for exclusive use space
2,000
Step Two: Divide the square feet of the space used for regular business use by the total square feet.
1,800 = 90% Space for rest of home
2,000
Step Three: Multiply the percent from Step Two by the Time percent.
90% x 40% = 36% Time-Space Percentage for rest of home
Step Four: Add the percent from Step One with the percent from Step Three.
10% + 36% = 46% Time-Space Percentage for entire home
Notice that without this formula for an exclusive use room the Time-Space percentage would have been only 40% (40% Time x 100% Space). See instructions to Form 8829 Expenses for Business Use of Your Home or the latest Family Child Care Tax Workbook and Organizer .
This handout was produced by Think Small (www.thinksmall.org).
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