List of Tax Deductions For an In-Home Daycare Provider
An in-home daycare program offers the flexibility of working from home, making it an appealing business venture for many individuals. Another advantage of caring for children in a private home presents itself in the form of tax deductions. Nearly every expense associated with the business offers a deduction at tax time. Record keeping in the form of dated receipts reduces objections from the IRS. A tax professional can offer specific suggestions for your business, which may result in more deductions. Tax laws change frequently so check for the latest IRS guidelines each year.
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Mileage
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A mileage deduction applies to any driving you do that relates to the daycare. Field trips or other instances of transporting the children under your care count toward the mileage deduction. Driving to complete errands for the daycare, even if the children aren't present, may also save on your income taxes. Driving to the store for supplies, the bank to make a daycare tuition deposit or to training for your licensing are examples of mileage deductions available. The IRS standard business mileage deduction for tax year 2010 is 50 cents per mile and 51 cents per mile for tax year 2011.
Food
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The majority of in-home daycare providers serve meals and snacks to the children throughout the day. The groceries purchased to feed the children represent another tax deduction possibility. Receipts that detail the food purchases provide the necessary documentation to take the deduction. Food for the daycare children should be purchased on a separate order from the family's food to make the deductions easier to calculate. A separate storage area for the daycare food ensures it stays separate.
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Supplies
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Supplies used for the daycare clients offer another option for a deduction. The supply deduction is similar to the one for food. The receipts for these purchases document the amount spent for items such as art supplies, baby wipes, cleaner, soap, paper towels and plastic wrap. When these items are consumed by both the daycare clients and your family, a portion of the expense may be deducted. Keeping a list of every item used throughout the day reveals the various supplies consumed by the children.
Utilities
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The monthly utility bills for the home present another opportunity for tax deductions. While the entire bill won't be eligible for a deduction, a portion of the bill may work. The amount that is deductible depends on the amount of space used for the daycare and the number of hours the daycare children are present in the home. Water, heat, trash and phone services fall under the utility category.
Home
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The actual house itself offers a possibility for tax deductions. Upgrades to the area used for the in-home daycare may work as a business deduction. Improvements may include new flooring, paint or electrical work in the area. Detailed receipts for these upgrades provide proof of the work. Property taxes, mortgage interest and insurance also present deduction opportunities.
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