DOUBLE TAP TO ZOOM WITH PHONE OR TABLET Family Child Care Record-Keeping Guide used for both personal and business purposes will be multiplied by your Time-Space percent- age; indicate those items on the receipt by marking them “T/S%” (or a similar notation). If you know that a particular item will be used more heavily for your business, you can mark your actual business-use percentage next to it. (For information on how to calculate your Time-Space and actual business-use percentage, see chapter 3.) It’s important to mark your receipts promptly after making each purchase, because it will be difficult to remember these details at the end of the year. Marking your receipts like this will make it much easier to identify and claim all your allowable deductions at the end of the year. Here are some example receipts, showing the notations for the deductible portion of each item: GROCERY STORE 1-4-20__ APPLES MILK EGGS 1.49 1.99 1.79 TOTAL 5.27 HARDWARE STORE 1-4-20__ BATTERIES LIGHTBULBS SANDPAPER 1.29 2.49 .59 TOTAL 4.37 Sales Tax When you claim expenses for your business, you can include any sales tax in the cost of your purchases; you don’t need to add up the sales taxes separately and claim them under “Taxes” on Schedule C. If a receipt is for items that are used 100% for your business, include the sales tax in the expense. If you are using your Time-Space percentage to claim part of the cost of an item, use the same percentage for the sales tax and include it as part of the expense. DISCOUNT STORE On the sample receipt at right, the first three items, 1-4-20__ totaling $37.30, are all shared business and personal $12.95 expenses. Here’s how you would calculate how much to $9.40 deduct for these items: Let’s say that your Time-Space $14.95 percentage is 40%. First you would multiply the $37.30 $1.90 $1.90 total by the sales tax percentage (6.5%) to get $2.42 ($37.30 x .065). You would add this to the total of the $41.10 shared expenses ($37.30 + $2.42 = $39.72). Then you $2.67 would multiply that total by 40% ($39.72 x .40 = $15.89). $43.77 The result ($15.89) is the amount that you would deduct. 22 COPYRIGHTED MATERIAL