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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 01-25-2014, 12:13 PM
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littlelionspreschool littlelionspreschool is offline
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Default Donation Question

Hello All,
I am fairly new to the daycare business as I opened in the summer of 2012. This year, I had an unusual circumstance in which a parent was diagnosed with cancer. The family had no insurance, so I decided to give their child free care to take some of the burden off their family around the holiday (gave free care for December 2013/January 2014). What I am wondering is, would I be able to use this as any kind of deduction for tax purposes? (maybe as a gift/donation?) My tax preparer is not very helpful!
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Old 01-25-2014, 01:05 PM
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Michael Michael is online now
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Welcome to the forum.. I would think that those items, supplies, etc that you used for this child should be a deduction. Maybe Tom Copeland will lend his ear on this one. Tom is also having a tax webinar next month and you should join us.

http://www.daycare.com/forum/showthread.php?p=428507
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Old 01-26-2014, 08:31 AM
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TomCopeland TomCopeland is offline
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Default Charity

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Originally Posted by littlelionspreschool View Post
Hello All,
I am fairly new to the daycare business as I opened in the summer of 2012. This year, I had an unusual circumstance in which a parent was diagnosed with cancer. The family had no insurance, so I decided to give their child free care to take some of the burden off their family around the holiday (gave free care for December 2013/January 2014). What I am wondering is, would I be able to use this as any kind of deduction for tax purposes? (maybe as a gift/donation?) My tax preparer is not very helpful!
I commend you for your generosity. Unfortunately, you cannot claim this as a charitable deduction, either as a business or personal expense. The reason is because the family is not a tax-exempt charity. You can deduct the food, supplies you spent on this child. But, the money you didn't receive is not a deduction.
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Old 01-27-2014, 06:39 PM
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littlelionspreschool littlelionspreschool is offline
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Thank you Tom. I donated items for an auction for Festival of Trees where the proceeds went to the local Food Shelf. Would that be counted as a tax donation? If so, do I count the amount for the supplies of donated items or the price the items sold for? The reason I ask is the cost for the items was around $100 for all three items and they sold for $1,200! BIG difference
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