Tax Deductions for Family Daycare Homes
The Internal Revenue Service (IRS) classifies family daycare centers as a business that provides short-term care for children, or elderly or disabled adults, in a home setting. This can include a single family house, an apartment or other residential buildings. Because home daycare centers often blur the lines between personal and business use of space, services and supplies, family daycare providers often miss tax deductions that can save them money. You do not have to send proof of expenses with your tax return, but you must keep accurate records.
Other People Are Reading
-
Home Business Use Deductions
-
You can deduct a percentage of your total home expenses, such as rent or mortgage, utilities and other services. To calculate the percentage of space your daycare uses in your home for rent or mortgage payment deductions, divide the area of the daycare space by the the total square footage of the house. This area must be used only for daycare purposes during the time your daycare is open. To calculate the percentage of utility, internet, phone and cable bills deductible on your tax return, calculate the number of hours you spent doing child care in a year and divide that number by 8,760, the number of hours in a year.
Consumables
-
You can deduct the costs of supplies that the children in your daycare use.This includes toilet paper, paper towels, diapers and wipes, cleaning products, disposable plates and cutlery and supplies for arts and crafts. If you or members of your family also use these supplies, you will only be able to deduct a portion of the costs. However, if you keep daycare-use supplies separate from family-use supplies, you can deduct the entire cost.
-
Meals
-
You can deduct 100 percent of the costs of food consumed by the children in your care. This includes groceries and pre-packaged meals you buy specifically for the children in your care. These expenses cannot include the costs of preparing or serving the food. You are also not allowed to include the cost of food you or members of your family eat, even if the food was originally intended for the children attending your daycare. If you do not know the exact cost of the meals you offer children in your care, the IRS allows you to deduct a standard amount per child for each meal.
License and Inspection Fees
-
Fees for required licenses and home inspections are fully deductible on your tax return. This includes safety and fire inspections, and expenses from background checks, finger printing, required classes, certifications and registration or licensing fees.
-
