What Can Be Writen Off for Daycare Supplies?

Diapering supplies are tax deductible.

Whether you run a home-based daycare, a child care center or a preschool program, the business-related expenses you incur are tax-deductible. Although expenses for daycare supplies qualify as write-offs, consider other money-saving deductions such as house expenses, utilities, property tax, house depreciation, repairs, advertising and professional services when preparing to file your taxes.

Identification

Cleaning, office, first aid, art and activity supplies, as well as food, toys, household items, professional dues and training materials associated with your daycare all qualify as tax deductions, according to the National Network for Child Care. Other items that you purchase for daycare, such as wipes, diapers, bottles, dinnerware and hand soap, also qualify. If your daycare is home-based and you buy items such as paper towels, toilet paper, facial tissue and dish detergent that are shared by your household and your business, these items can be written off based on a time-space percentage.

Time-Space Percentage

If you run an in-home daycare, several of your expenses may be shared by your household and your business. The amount of time you use your home for daycare and the percentage of space used for your business determines how much of your shared expenses are deductible. To calculate this percentage, first determine your time percent by dividing the number of hours you use your home for daycare by the total number of hours in a year. Next, calculate your space percent by dividing the square footage used for your business by the total number of square feet in your home. Multiply the two numbers to get the time-space percentage, according to the Redleaf National Institute.

Exceptions

Food that you buy for your business is deductible. However, if you receive reimbursement for food through a government-sponsored food program, you can only deduct food expenses that exceed your reimbursement. You can also claim expenses for meals served that are not covered by the food program. For example, if you serve a morning and an afternoon snack and the food program only allows you to claim one snack per day, your expenses for the second snack are deductible.

Considerations

When tracking daycare expense, notate items used 100 percent for your business. This helps you separate shared expenses from strictly business-related expenditures at tax time. Although you can separate expenses into categories such as cleaning, office, toys and food supplies for record keeping, it is acceptable to group them together under one category, according to the Redleaf Calendar Keeper.

Record Keeping

To maximize deductions, Redleaf advises that you keep receipts for all expenses, including those incurred for cleaning, repairing and maintaining your daycare or home. Keep a record of all meals served, notating meals not reimbursed by the food program. For an accurate time-space percentage for home-based daycares, track the hours for at least two months that your home is used for business, including time spent cleaning, planning daycare activities and record keeping.

References

• National Network for Child Care: Child Care Home: Financial Records, Fees and Taxes
• Redleaf National Institute: The Time-Space Percentage
• "The Redleaf Calendar Keeper"; Redleaf Press; 2010

Resources

• National Association for Family Child Care: NAFCC Mission and Goals