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Daycare and Taxes All things related to Taxes and running a Daycare post here. Topics of tax exemptions, forms, filings, tax write offs, IRS etc.

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Old 02-07-2011, 08:19 PM
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Default Food Program Reimbursements For Own Child As Income

First let me apologize if this topic has been previously discussed. I tried to view as many posts before feeling inclined to post this. My question is regarding the taxability of my food program reimbursements.

For most of 2010, I was reimbursed for my own child's meals. It was my understanding from some of Tom's other blogs/posts, my child's reimbursement is not considered "income" but a benefit and as such is not taxable income. I know I can not consider my own child's food as an expense either. I use the standard meal allowance for expenses. Therefore, I subtract all meals fed to my own child and then add any additional meals served but not reimbursed to the daycare children for my total eligible meals served for the sake of expenses.

If this is correct, then why does my sponsor issue a 1099-MISC with an amount that includes my own child's reimbursement? Perhaps they have to, but then how do I offset this so that my taxable income is lessened by my own child's reimbursement?

Please advise as I feel I am making this more complicated than needed.

Thank you in advance! Gotta love tax season!
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Old 02-07-2011, 08:36 PM
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Old 02-08-2011, 04:10 PM
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Default Food Program

Your understanding of how to treat Food Program reimbursements is correct.

Here's how you handle receiving a Form 1099. Put the entire amount from the Form 1099 on line 6 of Schedule C. Write "1099" to the left of this number so the IRS can see that your reported this (they are looking to match a number on your tax form with the 1099 number).

Next, include the meals and snacks served to your own children in your food expense. This will wipe out their income.


Join me on February 28th for my webinar "How to Reduce Your Taxes for 2010 and 2011. For more info:http://www.daycare.com/news/taxes/to...d-webinar.html
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