I've been spreading the news for the past 29 years about what family child care providers can deduct as a business expense. My book, Family Child Care Record Keeping Guide, lists over 1,000 allowable business deductions.
But not every expense is deductible in your business.
Obviously, items that are not used in your business cannot be deducted. If you use a sewing machine to make items for the children in your care you can a deduct a portion of the cost of the sewing machine. But if another provider doesn't use her sewing machine in her business she can't deduct hers.
Here are some expenses that are never deductible as a business expense:
First phone line into your home - It's not deductible even if you bought the phone to become licensed. You can deduct the business portion of a second phone line. See more on cell phones.
Parking or speeding tickets - Even if you are on a business trip!
Charitable contributions - These are deductible as personal itemized deductions. If you give money to a local softball team so they will put your name in their program, you can deduct this as advertising.
Personal clothing - Even though you may have special pants and shirts that you use only for your business they are not deductible because they aren't a uniform. However, clothes that you wear for business that aren't suitable apparel outside your home are deductible. This would include smocks, story time aprons, or clown outfits. Sweatshirts or T-shirts that display a family child care logo or message are deductible as advertising. Clothing you loan to the children in your care (or buy) are also deductible: mittens, caps, coats, etc.
Pet care - Don't try to deduct expenses for your dog or cat unless it's for a leash or fence to keep them away from the children. Fish, gerbils, birds, turtles or other animals that you use to help educate children may be deductible. See more.
Assessments shown on your property tax statement - This would include sidewalks, sewers, or other improvements to your land that are made by your local government. If you pay for your own sidewalk you can deduct a portion of the cost.
Image credit: users.utu.fi
For more information, see my book Family Child Care Record Keeping Guide.
Copyright 2011, Tom Copeland, www.tomcopelandblog.com