Tax Options for Family Day Care Providers

May 16, 2012 by  Filed under: Taxes 

If you are in the business of operating a family day care center, you may be seeking tax advice related to your business finances. Many family day care homes are independently owned and operated centers, and most provide childcare inside their own home. Regardless of whether you run your childcare center in your own home or in a separate commercial building, decreasing your financial liability to the U.S. government is certainly a key objective for most family day care providers. So what are some of the options available to you?

Business Use of Your Home If you continue to operate one of the many family day care homes in the U.S., you can consider writing off a portion of your home as well as home-related expenses on your tax return. You may be aware that all of the expenses related to operating your childcare center can be written off, such as supplies, toys for the kids, equipment, food, advertising, bank fees and more. However, a portion of other expenses, such as your home’s utilities, telephone expense, home maintenance and repairs and other similar expenses can also be written off. It is essential that you maintain excellent records of your expenses as proof of them if you are audited.

Tax Market Credit Family day care providers who provide childcare services in low income areas should consider the benefits of the tax market credit. This credit is also available for those childcare providers who are considered low income themselves and who run their own company. This is a credit that is designed to help companies such as yours provide beneficial services to those in need. While your company does operate on a for-profit basis, it may benefit from this credit. This credit is available for corporations and partnerships who offer a variety of services to individuals, including childcare. There are particularly strict requirements that must be met before you can qualify for this credit, so take care to review the requirements with a financial expert.

Many individuals and companies have a higher taxation rate than is necessary simply because they do not understand all of the deductions and credits available to them. Taxation law is confusing and complex. In order to avoiding paying more money than is necessary to the Internal Revenue Service, consider talking to an accountant or financial adviser regarding these and other options that may be available to you and your childcare center. This basic step can help you to minimize your liability to the Internal Revenue Service and increase profits.

Teresa Stockdale is a twenty-year plus veteran of early child hood education with ten years in the Human Recourses profession and strives to integrate and implement the quality in addition to the functionality of the day-to-day activities that supports and combines the owner’s objectives and the director’s techniques of a day care centers operations. Teresa blogs, writes articles, and promotes Global Human Resources and Early Childhood Development companies. If you would like to sign up for a FREE bi-weekly newsletter of Stockdale LLC please visit

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