A Home Daycare Facility Offers Numerous Tax
Deductions.

Mileage
A mileage deduction applies to any driving you do that relates
to the daycare. Field trips or other instances of transporting the
children under your care count toward the mileage deduction.
Driving to complete errands for the daycare, even if the children
aren't present, may also save on your income taxes. Driving to
the store for supplies, the bank to make a daycare tuition deposit
or to  training for your licensing are examples of mileage deductions
available. 

The IRS standard business mileage deduction for tax year 2010 is 50
cents per mile and 51 cents per mile for tax year 2011.


Food
The first step is to determine the business percentage of your

The majority of in-home daycare providers serve meals and
snacks to the children throughout the day. The groceries
purchased to feed the children represent another tax deduction
possibility. Receipts that detail the food purchases provide the
necessary documentation to take the deduction. Food for the
daycare children should be purchased on a separate order from
the family's food to make the deductions easier to calculate. A
separate storage area for the daycare food ensures it stays
separate.

To learn about tax rules for deducting meal expenses,
click this link.


Supplies
Supplies used for the daycare clients offer another option for a
deduction. The supply deduction is similar to the one for food. The
receipts for these purchases document the amount spent for items
such as art supplies, baby wipes, cleaner, soap, paper towels and
plastic wrap. When these items are consumed by both the daycare
clients and your family, a portion of the expense may be deducted.

Keeping a list of every item used throughout the day reveals the
various supplies consumed by the children.


Utilities
The monthly utility bills for the home present another opportunity for
tax deductions. While the entire bill won't be eligible for a deduction, a
portion of the bill may work. The amount that is deductible depends on
the amount of space used for the daycare and the number of hours the
daycare children are present in the home. Water, heat, trash and phone
services fall under the utility category.

Home
The actual house itself offers a possibility for tax deductions. Upgrades
to the area used for the in-home daycare may work as a business
deduction. Improvements may include new flooring, paint or electrical
work in the area. Detailed receipts for these upgrades provide proof of the
work.

Property taxes, mortgage interest and insurance also present deduction
opportunities.


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