Deductions for Daycare
If you run your own daycare, this list of possible deductions is a must have for ensuring you’re deducting all you can on your taxes as well as some examples of items that qualify for in each deduction category. For additional guidance on what you could be deducting, call us and set up an appointment today!
Gross receipts from sales and/or services
- Copies of checks and statements from sales, service, commissions, and/or bonuses
- Receipts for accounting, computer programs, tax preparation, and phone apps
- Business cards, flyers, social media, etc.
- Fees charged by banks to maintain an account, wire fees, ATM withdraw, or other bank services
Breakfasts, Lunches, and Dinners
- Meals and snacks that you feed your day care children. You can take this in one of two ways. The IRS has an amount that determines how much each meal and snack costs or you can deduct the actual cost of the meals.
- Money paid to children for helping with such things as delivering flyers and/ or product, stuffing envelopes, cleaning office and/or car, modeling. Must keep a detailed log of tasks and how paid.
- Supplies, brooms, vacuums, cleaners, laundry supplies, etc.
Dues and Subscriptions
- Dues to professional organizations and magazines that have to do with your trade or business
- Classes, seminars and/or books that you take to improve your business
- Anything you rent on a one time basis: carpet cleaner, toys, and tools.
- Gifts to clients and associates limited to $25 per person per year
- This deduction is determined by square footage of daycare vs square footage of the entire house. Also the number of hours you are available to provide day care and prep time is considered. Everything you put into your home is partially deductible: decor, bedding, furniture, appliances, dishes, trees, plants, fencing, repairs, maintenance, utilities, and home insurance.
- Anything you buy to maintain your home: paper supplies, light bulbs, paper towels, containers, etc.
- Daycare insurance, liability, vehicle, health, property etc.
- Interest paid on loans for equipment, mortgages, business buildings, business loans, lines of credit, credit cards, etc.
Legal and Professional Services
- Attorneys and accountants
- Professional license, city license, event permits and state licenses
- Meals with clients, potential clients, and associates. Note: entertainment is no longer deductible
- Credit card convenience fees to take payments by credit card such as merchant services Square, PayPal, etc.
- There are two ways to take a vehicle expense. If you choose mileage, you take the mileage used when picking up product, supplies, office supplies, meetings, handing out advertising or business cards, meals with clients, etc. The second option is Vehicle (see Vehicle deduction).
Office Expense other than consumables
- Office supplies, forms and receipts books, computer supplies, Internet, postage, printing, phone apps, etc.
- Any Expense for field trips you take or educational supplies if you include a preschool
- Hiring someone to clean, such as cleaning services, dry cleaning, drapes, carpet cleaning, etc.
- Any equipment, office furniture, computers, vehicles that cost over $500
- Repairs to equipment such as computers, office equipment, non-office equipment, toys, and other daycare equipment, etc.
- Cameras, alarm systems, guard dogs, or anything used to protect property
- Wipes, paper dishes, crayons, diapers, booster seats, baby swing, baby gates, arts, and crafts, party supplies, holiday decor etc.
- Taxes on property, payroll, sales tax, real estate, regulatory fees, business tax
- Cell phone, extra phone lines into home for business, fax, Internet, office land line
- Anything the children play with. If only used for daycare take 100%. If shared with own children, take percentage of time used for day care.
- Hotels, airfare, cab fare (ex. Uber or Lyft), public transit, parking, cleaning while away from home, business trip log, bus, train, etc.
- Electricity, gas, water, sewer, trash, HOA fees for office, shop or any other facility. See Home Office deduction for deductibility of home utilities
- There are two ways to take a vehicle expense. If you choose vehicle, you take the expense using the vehicle: fuel, parts, mechanics, oil changes, car washes, insurance, etc. Along with taking the vehicle expense you can also depreciate the vehicle. Note that unless the vehicle is used solely for the business you must track business use vs. personal use. The second option is Mileage (see Mileage deduction).
- Anyone you pay to help care for the children or clean and maintain the facility
- Internet hosting and services, website design, and maintenance
- Expenses to maintain yard such as mowing and weeding, purchasing plants, and/or maintaining play areas etc.