Security Deposit Return

[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

[284878]

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

[TomCopeland]

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.

[Reimel61]

thank you