Daycare.com Forum
Daycare and Taxes>Are The Cost Of Meals And Snacks 100% Deductable?
Unregistered 02:10 PM 05-10-2013
Hi there! I'm new to the forum as well as getting all my ducks in a row since I wish to start a home daycare this coming fall.
I was wondering... Can I deduct 100% of the cost of serving the children food?
I was wondering... Can I deduct 100% of the cost of serving the children food?
Sunchimes 02:36 PM 05-10-2013
I guess they could be, but that is certainly not the easiest way. I'll give my opinion in a minute, but first, let me introduce you to our day care financial guru and hero, Tom Copeland. http://www.tomcopelandblog.com/
There isn't much about the financial and/or legal end of day care that he doesn't know, and he willing helps us. He will probably show up here soon. He has written a series of books (look on his blog) to help us. He has saved me hundreds if not thousands of tax dollars. I recommend several of them, but if you can only buy one, get the Record Keeping Guide. It explains it quite well.
http://www.tomcopelandblog.com/toms-books-.html
Also, go back through this section of the forum and read back posts. It will help you more when you get started than you can believe.
Now, on to your question. Daycares have some tax rules that no other businesses have. You can keep meticulous records of food buying and take the deduction, but it is very detailed. You have to justify that if you bought a loaf of bread, how much of that bread did your family use? It's a mess.
What most of us do is the standard meal deduction. WBriefly, we keep records of the hours and days each child attends. Every meal you can prove you served can be deducted using a standard amount. For example, if you keep a sign in sheet or log, you can prove that on Monday, Tommy, Susie, and George were in care from 8 am until 6 pm. This backs your claim that you fed 3 breakfasts, 3 lunches, and 6 snacks that day. In 2013, the deduction for each breakfast is $1.27, lunch and dinner are $2.38, and snacks are .71. So, total all of those up each day you have kids in care, and that's your food deduction for that day.
Be sure you learn about time/space percentage before you start. It is the single most helpful bit of information you will ever learn about your business. Seriously, the best!
Hope this helps. Ask more questions if I just confused you.
There isn't much about the financial and/or legal end of day care that he doesn't know, and he willing helps us. He will probably show up here soon. He has written a series of books (look on his blog) to help us. He has saved me hundreds if not thousands of tax dollars. I recommend several of them, but if you can only buy one, get the Record Keeping Guide. It explains it quite well.
http://www.tomcopelandblog.com/toms-books-.html
Also, go back through this section of the forum and read back posts. It will help you more when you get started than you can believe.
Now, on to your question. Daycares have some tax rules that no other businesses have. You can keep meticulous records of food buying and take the deduction, but it is very detailed. You have to justify that if you bought a loaf of bread, how much of that bread did your family use? It's a mess.
What most of us do is the standard meal deduction. WBriefly, we keep records of the hours and days each child attends. Every meal you can prove you served can be deducted using a standard amount. For example, if you keep a sign in sheet or log, you can prove that on Monday, Tommy, Susie, and George were in care from 8 am until 6 pm. This backs your claim that you fed 3 breakfasts, 3 lunches, and 6 snacks that day. In 2013, the deduction for each breakfast is $1.27, lunch and dinner are $2.38, and snacks are .71. So, total all of those up each day you have kids in care, and that's your food deduction for that day.
Be sure you learn about time/space percentage before you start. It is the single most helpful bit of information you will ever learn about your business. Seriously, the best!
Hope this helps. Ask more questions if I just confused you.
melilley 05:36 PM 05-10-2013
You could also check into enrolling in the food program. You get reimbursed for either two meals and one snack or two snacks and one meal. There is also a program called Minute Menu Kids (MMK) that you can get and it's so easy to keep track of meals and snacks. Some food program sponsors offer it at a deeply discounted price when you sign up.
Sorry, this is a bit off topic, but I thought I would throw it out there. And I agree with PP, the standard meal deduction is the way to go!
Sorry, this is a bit off topic, but I thought I would throw it out there. And I agree with PP, the standard meal deduction is the way to go!
Unregistered 08:15 PM 05-11-2013
Hi there, me again. So if I keep receipts of all the groceries i buy for the daycare kids only and keep my own grocery receipts separate I have to prove how much they ate of that food that was purchased just for them? How is that even possible?
Lyss 09:05 PM 05-11-2013
Originally Posted by Unregistered:
Hi there, me again. So if I keep receipts of all the groceries i buy for the daycare kids only and keep my own grocery receipts separate I have to prove how much they ate of that food that was purchased just for them? How is that even possible?
Here is the link to Tom's blog about claiming food expenses http://www.tomcopelandblog.com/repor...penses.html%20 Tom is an AMAZING resource, hes' been working to help providers and advocate on our behalf since the early 80s. Seriously consider checking out his blog, its straight forward and informative. Between his blog and tax book he make my life SOOO much easier at tax time! Hi there, me again. So if I keep receipts of all the groceries i buy for the daycare kids only and keep my own grocery receipts separate I have to prove how much they ate of that food that was purchased just for them? How is that even possible?
If you are keeping everything separate (your family's food vs daycare) you could just track your receipts but you have to make sure that you save your personal receipts as well in case the IRS ever asks you to prove it. Plus you can not deduct for your own children, even if they eat the "daycare" food, so you'd have to deduct that out.
I agree with sunchimes post, standard meal deduction is WAY easier and I personally think you come out a head.
Blackcat31 08:46 AM 05-12-2013
Originally Posted by Unregistered:
Hi there, me again. So if I keep receipts of all the groceries i buy for the daycare kids only and keep my own grocery receipts separate I have to prove how much they ate of that food that was purchased just for them? How is that even possible?
Please consider registering for the forum Hi there, me again. So if I keep receipts of all the groceries i buy for the daycare kids only and keep my own grocery receipts separate I have to prove how much they ate of that food that was purchased just for them? How is that even possible?
There are hundreds of threads about food, taxes and daycare related expenses that may be helpful to you
There are also lots of perks to being a registered member.
Unregistered 11:58 AM 05-14-2013
I do plan on reading tons of these threads to get as much info as I can, as well as registering.
I was initially hoping to offer the children organic meals and snacks instead of cheaper food without jacking up the price of daycare to make up for the rise in meal cost. I thought that would be a clever way to get ahead of the competition if I could write it off at the end of the year.
I was initially hoping to offer the children organic meals and snacks instead of cheaper food without jacking up the price of daycare to make up for the rise in meal cost. I thought that would be a clever way to get ahead of the competition if I could write it off at the end of the year.
AmyKidsCo 07:26 PM 05-14-2013
Definitely check out Tom Copeland's information - he's the best!
IMO it depends on how hard it would be for you to keep the food separate. I'm on the Food Program and just use those figures for my food expenses because it's too hard to keep our family food separate from the daycare food. I tried for a couple of years but we kept "borrowing" from the other and it wasn't worth the hassle.
If you join the Food Program it may also depend on whether you're being reimbursed on Tier I or Tier II. If you're on the lower Tier and can separate food you may be better off doing it that way. I'm in a low income school area so I get Tier I, so my reimbursement and expenses pretty much even out.
IMO it depends on how hard it would be for you to keep the food separate. I'm on the Food Program and just use those figures for my food expenses because it's too hard to keep our family food separate from the daycare food. I tried for a couple of years but we kept "borrowing" from the other and it wasn't worth the hassle.
If you join the Food Program it may also depend on whether you're being reimbursed on Tier I or Tier II. If you're on the lower Tier and can separate food you may be better off doing it that way. I'm in a low income school area so I get Tier I, so my reimbursement and expenses pretty much even out.