What Can I Claim for Doing a Day Care?
Working as a day care provider is a time-consuming occupation. A day care provider is faced with a number of costs associated with offering daily care to children. Therefore, it's important to set up an accounting system that allows you to easily deduct your business costs when it comes time to file your taxes. Consulting a tax accountant, at least the first few years you are open, will help you find all of your deductions.
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Supplies
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Any supplies that you use specifically for the day care are tax deductible. For example if you purchase toys or art supplies for the day care, you can deduct them. If you have separate cleaning supplies, you can deduct those as well. Additionally, you may be able to deduct a percentage of the supplies that you share with your family members.
Insurance
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If you have separate insurance for your home day care business or if you have an insurance rider on your home policy, you can deduct the amount you pay in insurance each year. There are policies offered specifically for home day care providers that offer protection against injuries, as well as false accusations of abuse.
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Food and Transportation
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Any food you use for your day care is tax deductible. The food deduction can either be prorated, like the supplies you've purchased, or you can keep the purchases separate to make your accounting easier. You also can deduct transportation costs at the stated mileage rate for the year. Each year the IRS releases a table for that year specifying how much you can deduct per mile.
Home Office
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You may be able to use the home office deduction if you are operating a home day care. This deduction is often flagged, and you need to follow the guidelines specifically in order to qualify. If you have a separate office that you use only for your day care business, you can claim it. Additionally, if you only use certain rooms for the day care, you can deduct their use, as well. You will need to have precise measurements on your home, yard and office space for the deduction. You can also prorate other bills, such as your electricity and gas, since a portion of them are used for your day care business.
Registration Fees and Training
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Any registration fees and classes you need to take to stay certified are tax deductible. For example, the cost of completing your first aid and CPR training each year can be deducted. Registering for in-service credits can also be deducted from your business. If you are working on an undergraduate degree related to child care, you can consider claiming either the American Opportunity Credit or the Lifelong Learning Credit, and see which will benefit you most this tax year.
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References
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