• If the employer is responsible for the work behavior, negligence and personal behavior of a worker in contact with customers and the public during times that services are performed, employee status of the worker is indicated. • If the services provided are necessary to the fundamental business purpose for which the organization exists, an employment relationship is indicated. Large Material Goods and Computer Software An operating child care business may find it necessary to purchase larger items of equipment like office furniture, office equipment, refrigerators, televisions, computers and computer software, child size furniture, indoor and outdoor recreational equipment like swing set or climbing gyms. Historically, such larger equipment purchases were required to be depreciated over a period of years according to an Internal Revenue Service schedule with only a percentage of the cost of acquisition being deductible in the year in which the equipment was placed into service. For tax years beginning in 2016, Section 179 of the Internal Revenue Code allows a deduction of the full cost of such equipment (up to a total of $500,000) in the year in which the equipment is placed into service provided that the total amount spent for equipment in that year does not exceed $2,010,000 (after which the amount deductible is reduced on a dollar for dollar basis by the amount that the cost of all equipment exceeds $2,010,000). Both the cap and the investment limitation will be adjusted annually for inflation. To be eligible for the Section 179 deduction software must meet some specific requirements: • It must be readily available for purchase by the general public. • It must be subject to a non-exclusive license. • It must not be a substantially modified version of earlier software.
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