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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 04-08-2013, 07:49 PM
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Default Running A Daycare From My Parents' Home

I have been running my daycare from my parent's home. I give my parents a few hundred dollars a month for my share of expenses. I know that I'm not able to claim expenses on Form 8829 for business use of home, since it's not MY home. However, if my parents claimed the amount that I give them as rental income, would THEY be able to file Form 8829, and if so, how would the rules differ for them in what they could claim - as far as how much square footage, operating hours, etc. Or is that even the right way to do it? Should they ONLY file Schedule E & claim all expenses there? I just want to do it right and make sure we both get all the deductions we're allowed. Thank you.
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Old 04-09-2013, 08:56 AM
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Default house expenses

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I have been running my daycare from my parent's home. I give my parents a few hundred dollars a month for my share of expenses. I know that I'm not able to claim expenses on Form 8829 for business use of home, since it's not MY home. However, if my parents claimed the amount that I give them as rental income, would THEY be able to file Form 8829, and if so, how would the rules differ for them in what they could claim - as far as how much square footage, operating hours, etc. Or is that even the right way to do it? Should they ONLY file Schedule E & claim all expenses there? I just want to do it right and make sure we both get all the deductions we're allowed. Thank you.
If you paid rent they would report this on Schedule C, not 8829. The could claim some house expenses on Schedule E. Then you could deduct the rent as a business expense. If you do this, have your parents check with their homeowners insurance to make sure they are still covered since they would not be using their home for commercial purposes. They should also check with their county to see if their property taxes would go up.
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