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 stop you from leaving $10K on the table.
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, up to $150,000 per year. 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.