Security Deposit Return
 

Hi

How do I address a refunded security deposit tax wise? Normally I apply it to the last week of care but I abruptly ended care with this family due to Covid and wanting to remain small in size due to the pandamic. Due I count it as a business expense? and not worry that she has already claimed it in a previous year or do I deduct the amount from her year end payment statement and just count as less income for my business?

Thanks

If the refund happens now then it has to happen this year not next. (Per Tom Copeland)

Originally Posted by Reimel61:
Hi

How do I address a refunded security deposit tax wise? Normally I apply it to the last week of care but I abruptly ended care with this family due to Covid and wanting to remain small in size due to the pandamic. Due I count it as a business expense? and not worry that she has already claimed it in a previous year or do I deduct the amount from her year end payment statement and just count as less income for my business?

Thanks

A refunded security deposit is a business expense. Call it "parent refund" and put it under "other expenses" on Schedule C. Deduct this from the amount of her end of year receipt statement.

thank you