You care for children. You don't track time-and-space percentages and Tier I food rates. We run §280A the daycare special way, claim the standard meal allowance, capture the §45F credit for your employer clients, and help you avoid missed deductions.
Childcare gets two breaks no other home business gets: the §280A(c)(4) daycare exception that drops the regular-and-exclusive use requirement, and the CACFP/T-F food allowance that replaces receipts with a per-meal rate. Both are routinely missed. We use them.
Most home offices fail without exclusive use. Daycare gets a carveout: you deduct the time-business-use percentage of your home (hours of care divided by total hours in the year, times the regular-use square footage). A licensed in-home provider open 50 hrs/week and using 60% of the home typically hits a 17% to 20% business-use ratio.
IRC §280A(c)(4); Treas. Reg. §1.280A-2(i); Pub 587USDA CACFP Tier I rates for 2024-25 are $1.65 breakfast, $3.04 lunch/supper, $0.97 snack. You may use the standard rate per meal served without keeping grocery receipts, OR actual cost if records support a higher number. Most home providers serving 6 kids three meals net $9K to $12K of food deduction using the standard rate.
Rev. Proc. 2003-22; USDA 7 CFR Part 226; Pub 587If you contract with a corporate employer to provide on-site or near-site care for their workforce, that employer gets a §45F credit of 25% of qualified expenses plus 10% of resource-and-referral costs, subject to an annual cap. Pricing your contract to maximize the client's credit is a sales advantage. We help you structure it.
IRC §45F; Notice 2024-58; Form 8882Running pickup or after-school care across a state line (e.g. a Tampa-based preschool with a Pinellas County route) can create economic nexus and a non-resident state return obligation. We track route mileage and registration, file the right state withholding for any staff in another state, and prevent surprise notices.
Wayfair (138 S.Ct. 2080); state nexus statutesState licensing fees, CPR and first aid certification, child development associate (CDA) credential costs, background check fees, fire inspection, and Child Care Resource & Referral subscriptions all deduct under §162. Continuing education hours required by state license are deductible without the "new trade or business" limit.
IRC §162(a); Treas. Reg. §1.162-5Cribs, high chairs, learning toys, playground equipment, fence improvements for the daycare yard, and curriculum materials qualify for §179 expensing. Wages to your spouse or assistant get a federal withholding-and-FICA structure that, done correctly, opens a household employee §45F-friendly arrangement. We pick the right setup.
IRC §179(d); §3401; §162(a)In-home licensed daycare provider, 6 kids enrolled, open 11 hours/day Monday through Friday. Prior preparer skipped the §280A daycare deduction entirely and used grocery receipts instead of the Tier I standard meal rate.
$11,000 home use$11,000 §280A home-use deduction (mortgage interest, utilities, insurance, depreciation × time-and-space %) plus $9,400 standard meal allowance previously left off. Combined federal tax savings at marginal rate. State savings on top.