Form 8829, Line 5 - definition of "days available for daycare"

[workfromhomemom]

This year was my first year full time babysitting, 5 days a week 10-12 hours a day.  I am not "Open" on weekends, holidays, and I take 2 weeks off for vacation. I figured I was "open for business" 253 days of the year and worked 229 of those 253 days.  (The days missed were sick days and 10 days of vacation.) 

QUESTION: Does being closed on weekends and holidays mean I "started or stopped" using my home during the year and I can prorate the "number of days the home was available for daycare?" 

Should I use 253 days (x24hrs) versus using 365 days (8,760).

Instructions for Form 8829, Line 5 says "If you started or stopped using your home for daycare in 2019, you must prorate the number of hours based on the number of days the home was available for daycare. Do not enter 8,760. Instead, multiply 24 hours by the number of days available and enter the result."

[ColeenD3 · Accepted solution]

You did not stop your business. You merely had days you were not available.

This is from the IRS. See this LINK for more information.

The time percentage is the total number of hours the facility was used for the child care business during the year (the numerator) divided by the total hours in the year (8,760 hours). The provider should record how the total hours the facility was used, was computed. Hours spent cooking, cleaning, and preparing activities for the business of child care could be included in the calculation of the numerator of the time percentage if the tests for deduction under IRC Section 162 (ordinary and necessary expenses) are otherwise met under the facts of the particular case. As illustrated in Revenue Ruling 92- 3, one hour is added to the 11 hours of actual day care operation for the ½ hour before and ½ hour after regular hours spent preparing for and cleaning up after the children.

[bnnairns05]

I closed my daycare February 26,2021 but continued sorting, selling and closing info with agencies.  When completing time space on Turbo tax I've entered:

Number hours opened per day - 11

Days per week - 5

Number of days the home was closed (includes holidays, vacations, and other days the business was not operating):  I calculated this for weekends or holidays I was closed from January 1 - March 31 as 63

  I did also enter in turbo tax the number of months office used was 3

So is this correct or number of days home closed should it be April-December days?

I've only entered my utilities for Jan-March

[JillS56]

No, do not count any days or hours for the period of April through December 2021.   You cannot count days or hours that your daycare was not opened.  The period of time you calculate would be from January 1, 2021, through March 3, 2021.   Only utilities or other expenses that you can include would be during that same time period.    The number of days and hours would be the days and hours from January 1, 2021, to February 26, 2021, that you were open.  Do not count weekends if you are not typically open on weekends.  Then calculate the number of days and hours that you used the office during the month of March 2021.  You would include as closed any holidays during that time period that you closed on a Monday through Friday. 

In your question, you stated you counted the use of your office through March 31, 2021.   Your information is contradictory.   First, you said you operated your business from January 1, 2021, through February 26, 2021, and then you indicate that the office was used for 3 months.   I would say the date you stopped using your home for daycare would be March 31, 2021.   Even though you did not have children, you are indicating that you were still using the office.    I would calculate the days and hours by including the days and hours in March that you still used the office. Separate the month of March between days and hours working on the daycare and days and hours closed.   Do not count weekends.   

Form 8829 - Calculate Days/Hours