I have a daycare in my home, but not licensed (I don't watch enough kids to need to be licensed). When claiming my income, can I claim my utilities used, square feet of house used for daycare and hours daycare is open? How about food and supplies? Or can you only do this if you're licensed?
2007-03-04 07:50:56 · 2 answers · asked by Anonymous in Business & Finance ➔ Taxes ➔ United States
If you make money with your daycare then it is not considered a hobby, therefore it must be a business. You need to claim the income on Schedule C and you can offset that income by any expenses you incurred for your business. You do have the right idea as far as utilities. You have to allocate them by the percentage of your home that was used for the daycare. You should also be able to deduct food to feed the kids, travel expenses, and any other supplies that you had to buy. It doesn't matter at all if you are licensed or not.
2007-03-04 09:16:36 · answer #1 · answered by k_hart100 3 · 0⤊ 0⤋
The IRS doesn't care where its money comes from. Report the income and declare the expenses incurred in accordance with income tax rules and you will be fine.
2007-03-04 16:19:22 · answer #2 · answered by skip 6 · 0⤊ 0⤋