Daycare Providers

Call Beucler Company CPA to help you with maximizing your income tax deductions.

Income tax laws can be difficult to understand and are always changing.  Make sure you are maximizing your deductions and that your records are audit proof.  

Daycare provider - A business that provides child care services to eligible children in the taxpayer’s home.  Eligible children do not include children who are full-time or part-time residents in the provider’s home or children whose parents or guardians are residents of the provider’s home.  There are several unique tax laws for the daycare provider.  

Daycare standard meal allowance – Daycare providers can use a standard meal and snack rate or actual costs in deducting food expenses.  Providers that deduct actual costs for food are not allowed a deduction for the cost of food consumed by their family.  Because daycare providers often purchase food that is used for their own families as well as in carrying on their daycare business, they may have difficulty substantiating the portion of the cost of food that is attributable to their daycare business.  It is also burdensome for daycare providers to keep receipts for all food purchased during the tax year.  The standard meal and snack allowance is designed to minimize disputes and reduce record-keeping burdens.

Standard meal and snack rates may be used for one breakfast, one lunch, one dinner and three snacks per eligible child per day.  The daycare provider must not include any costs which are reimbursed.  The 2013 standard meal and snack rates per child per day are as follows:

  • Breakfast  - $1.27
  • Lunch  -  $2.38
  • Dinner  -  $2.38
  • Snacks  -  $.71 each

Records must be kept that include the name of each eligible child, dates and hours of attendance, and the type and quantity of meals and snacks served.

Nonfood supplies such as toys, paper plates, administrative supplies and cleaning supplies are deductible in addition to the standard allowance.

Daycare business use of home – A daycare provider operating out of their home may deduct a portion of the dwelling even if it is not set aside exclusively for the business.  A daycare provider determines the area of the home used for business, divided by the total area of the home, multiplied by the percentage of time devoted to the daycare activity.  The percentage of time devoted to the daycare activity includes the time children are present, clean up time, preparing activities, and planning time.

There are still other catches to the tax code, please contact us before acting to verify you qualify.

The taxpayer should seek advice
Based on the taxpayer’s particular circumstances
From an independent tax advisor

Beucler Company CPA, Inc
2503 Summit St.
Columbus, OH  43202
(614) 784-1099

Internal Revenue Service Circular 230 Disclosure:  As provided for in Treasury regulations, advice (if any) relating to federal taxes that is contained in this communication (including attachments) is not intended or written to be used, and cannot be used, for the purpose of (1) avoiding penalties under the Internal Revenue Code or (2) promoting, marketing or recommending to another party any transaction or matter addressed herein.