Quick Tax Tips For The Tax Season (Tip #27)
DEDUCTING MEALS AS A DAYCARE PROVIDER
In today's post, we will learn straight from the IRS about the basics of deducting meals as a daycare provider. By the way, God Bless all child care providers! For more information, click on the source link.
Meals
If you provide food for your daycare recipients, do not include the expense as a cost of using your home for business. Claim it as a separate deduction on your Schedule C (Form 1040). You can never deduct the cost of food consumed by you or your family. You can deduct as a business expense 100% of the actual cost of food consumed by your daycare recipients (see Standard meal and snack rates , later, for an optional method for eligible children) and generally only 50% of the cost of food consumed by your employees. However, you can deduct 100% of the cost of food consumed by your employees if its value can be excluded from their wages as a de minimis fringe benefit. For more information on meals that meet these requirements, see Meals in chapter 2 of Pub. 15-B, Employer'sTax Guide to Fringe Benefits.
If you deduct the actual cost of food for your daycare business, keep a separate record (with receipts) of your family's food costs.
Reimbursements you receive from a sponsor under the Child and Adult Care Food Program of the Department of Agriculture are taxable only to the extent they exceed your expenses for food for eligible children. If your reimbursements are more than your expenses for food, show the difference as income in Part I of Schedule C (Form 1040). If your food expenses are greater than the reimbursements, show the difference as an expense in Part V of Schedule C (Form 1040). Do not include payments or expenses for your own children if they are eligible for the program. Follow this procedure even if you receive a Form 1099-MISC, Miscellaneous Income, reporting a payment from the sponsor.
SOURCE: https://www.irs.gov/publications/p587/ar02.html#en_US_2016_publink1000226361
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