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Daycare and Taxes>Security Deposit Return
Reimel61 06:41 AM 01-20-2021
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
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284878 08:15 AM 01-20-2021
If the refund happens now then it has to happen this year not next. (Per Tom Copeland)
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TomCopeland 08:28 AM 01-21-2021
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.
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Reimel61 11:02 AM 01-21-2021
thank you
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Tags:deposits, refund, tax advice
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