Where to Claim Groceries for Day Care Provider Tax Deductions?

As an in-home day care provider, you're allowed by the IRS to enter various deductions related to your business on your federal tax return. To take advantage of a permissible deduction for the groceries you use to prepare meals and snacks for the children you're paid to care for, you'll need to know where to report the amount of your annual food expenditure on your return.

If you buy food for the kids in your day care and aren't reimbursed for any or all of the costs, you can deduct the sum of all of your food expenditures on Part V of Schedule C of Form 1040. If you receive reimbursements for your day care's groceries through the United States Department of Agriculture's Child and Adult Care Food Program that are more than the amounts you can prove you paid out-of-pocket, record the excess as income on Part I of Schedule C of Form 1040.

If your business qualifies as a family day care provider, you have the option of using the Internal Revenue Service's standard meal and snack rates to calculate your day care's grocery costs instead of keeping track of the money you spend on food to feed the children left in your care. According to the Internal Revenue Service, your business is a family day care provider if you provide family day care to minors as a business and offer care for eligible children that is not medical in nature, does not include the transfer of legal custody, and that normally lasts less than 24 hours in a single day.

The Internal Revenue Service publishes standard meal and snack rates each year that owners of family day care providers can use to calculate their food costs and corresponding tax deductions. The standard meal and snack rates include monetary limits for costs related to breakfast, lunch, dinner and a snack. To calculate your tax deduction, you will multiply the appropriate rate by both the number of the matching meals or snacks you served daily and the number of days each was served.

If the Internal Revenue Service cited $1.50 as the monetary cost for breakfast, $2.00 for lunch, $2.25 for dinner and $0.75 per snack, and you served breakfast, lunch, dinner and three snacks to 7 eligible children on 175 days in a year, you would take a deduction in Section V of Schedule C in the amount of $7,962.50, or ($1.50 x 7 x 175) + ($2.00 x 7 x 175) + ($2.25 x 7 x 175) + ($0.75 x 7 x 175). If your food cost remained the same, and your business was reimbursed $10,000 for the cost of the meals and snacks it provided to eligible children, you would record income equal to $2,037.50 in Section I of Schedule C of Form 1040.