It's not uncommon for a new provider to have more expenses than income. You want to still claim it all for two reasons. One - the law requires you to claim any deductions you are entitled to. Two - it will benefit you to claim them.
If you claim everything and report a loss, the loss gets put on your Form 1040 and will reduce any other income from your family (spouse). Your house expenses on Form 8829 can't create a loss, but you can roll over these expenses to the next year. Thus, you can reduce income in 2011.
Join me for my February 28th webinar on "How to Reduce Your 2010 and 2011 Taxes" sponsored by daycare.com. For more info:
https://www.daycare.com/news/taxes/t...d-webinar.html