Food Program Income And Standard Deduction

[EAP]

I'm a tier II provider and my program rep said I can claim the difference between tier I and tier II on my taxes? How does that work?

I have my tax worksheet for food program if this helps:

Total taxable income from food program: 847.82

Total deductible food expense: $1939.21 (this is based on tier I rates)

I know I enter 847.82 on line 6 of schedule C - but I am confused if I enter the 1939.21 on line 27 or do I enter 1091.39 (1939.21 - 847.82)?

[frugalmama4]

If you are claiming meals based on the standard meal allowance then you would claim the meals based on the tier 1 reimbursement rates in effect at the beginning of the calendar year... "even though you are a tier 2 provider" this is a "benefit" the IRS gives

ex: Bf 1.24 x 50=
LN 2.32 X50
SN .69 X50=

If you have Tom workbook it's on page 107

[EAP]

Originally Posted by frugalmama4

If you are claiming meals based on the standard meal allowance then you would claim the meals based on the tier 1 reimbursement rates in effect at the beginning of the calendar year... "even though you are a tier 2 provider" this is a "benefit" the IRS gives

ex: Bf 1.24 x 50=
LN 2.32 X50
SN .69 X50=

If you have Tom workbook it's on page 107

his workbook wasn't clear if you deduct the amount you received from the food program from the standard deduction - so the second amount is the standard deduction amount based on tier I rates, i just wanted to know if I need to deduct the amount I received from the food program. My food program rep said I could claim the difference so she confused me.

[frugalmama4]

oh I see what you mean...forget what your food rep said about the difference.

With this rule the irs allows you to use the standard rate to determine your food deduction rather you're on the food program or not and no matter what tier you are.

"Calendar Year Payment Summary 2012" This is the tax worksheet you're looking at from the food program...right? If so it should have automatically calculated your deductible expense by the higher tier (1)...if not then do the following to get your total.

So if you're looking a the "Calendar Year Payment Summary 2012" from the food program...just calculator your deductible food expense based on the number of meals severed for each meal...(bf, ln, sn) x the tier 1 rate...this becomes your "deductible expense"

Be sure to add in any meals NOT reimbursed by the food program also (meals you would have severed over the allowed 3-per/day per-child)

Does this help?

[frugalmama4]

Originally Posted by EAP

his workbook wasn't clear if you deduct the amount you received from the food program from the standard deduction - so the second amount is the standard deduction amount based on tier I rates, i just wanted to know if I need to deduct the amount I received from the food program. My food program rep said I could claim the difference so she confused me.

Never-mind my reply below....Lol I re-read your post. And your right...you got it.

No, you don't deduct the amount you received from the food program...your tax worksheet list the "taxable income $847.82" and your "deducible expense $1939.21" that's all you need from this page...

[EAP]

that's the form I'm looking at and the $1939.21 amount is the tier I rates x all meals served so that's what i enter on schedule C? ignoring what the rep said so on line 6 I have the income I received and on line 27 I have the tier I rate for all the meals - the rep had me all confused.

Thank you!

[frugalmama4]

Originally Posted by EAP

that's the form I'm looking at and the $1939.21 amount is the tier I rates x all meals served so that's what i enter on schedule C? ignoring what the rep said so on line 6 I have the income I received and on line 27 I have the tier I rate for all the meals - the rep had me all confused.

Thank you!

Kool Beans...glad to help.

[TomCopeland]

Originally Posted by EAP

I'm a tier II provider and my program rep said I can claim the difference between tier I and tier II on my taxes? How does that work?

I have my tax worksheet for food program if this helps:

Total taxable income from food program: 847.82

Total deductible food expense: $1939.21 (this is based on tier I rates)

I know I enter 847.82 on line 6 of schedule C - but I am confused if I enter the 1939.21 on line 27 or do I enter 1091.39 (1939.21 - 847.82)?

Show your Food Program income on Schedule C, line 6.
Show your food expenses ($1,939.21) on Schedule C, line 27a.
What your food program person is saying is to put nothing as income and $1,091.39 as an expense. This is not the way the IRS recommends, even though it comes out the same taxwise.

[itlw8]

She is an idiot Print out Toms article and send it to her. She knows not what she speaks of.

[jokalima]

So is there a form to calculate food expenses? Or I just keep track when i do grocery?:

[TomCopeland]

Originally Posted by jokalima

So is there a form to calculate food expenses? Or I just keep track when i do grocery?:

When claiming food expenses you have two choices. Use the standard meal allowance rate or estimate your actual food expenses.

If you use the standard meal allowance rate you do not need to save any food receipts. Instead, add up all the meals and snacks you serve (including those you were reimbursed by the Food Program) and multiply by $1.24 breakfast, $2.32 lunch/supper and $.69 snacks. Don't count any meals/snacks served to your own children.

If you use the actual food cost method you must save all your food receipts (business and personal) and estimate what it cost to serve food to the day care children. You can buy food separately, estimate your own average cost per meal, calculate your business food as a percent of your total food bill, etc. For details see my book Family Child Care Record Keeping Guide.