Not Licensed - Do I qualify?

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    Not Licensed - Do I qualify?

    I am not licensed, but have an in-home daycare for 5 children I. have a business license in my city. Can I claim all the same deductions as a licensed provider (food, t/s%, etc.)
    Last edited by Michael; 01-31-2011, 10:00 PM.
  • Michael
    Founder & Owner-Daycare.com
    • Aug 2007
    • 7950

    #2
    What state do you reside in? Does your state allow for unlicensed care?

    Comment

    • TomCopeland
      Business Author/Trainer
      • Jun 2010
      • 3062

      #3
      Not Licensed

      As long as you are not in violation of your state child care licensing law, you can claim the same deductions as licensed providers. If you are in violation, then you can't claim house expenses, but you can claim all other expenses.
      http://www.tomcopelandblog.com

      Comment

      • llove530
        Daycare.com Member
        • Jan 2011
        • 23

        #4
        What do you mean by house expenses? Can you provide examples?

        Comment

        • TomCopeland
          Business Author/Trainer
          • Jun 2010
          • 3062

          #5
          Not licensed

          House expenses include: property taxes, mortgage interest, house insurance, utilities, house repairs and house depreciation
          http://www.tomcopelandblog.com

          Comment

          • llove530
            Daycare.com Member
            • Jan 2011
            • 23

            #6
            What if you only claim what your state legally allows you but still keep more children?

            Comment

            • TomCopeland
              Business Author/Trainer
              • Jun 2010
              • 3062

              #7
              Not Licensed

              If you are caring for more children than state law allows you cannot claim any of your house expenses as a business expense. It doesn't have anything to do with how many children you claim. Being out of compliance with state child care laws also exposes you to additional liability if a child is injured.
              http://www.tomcopelandblog.com

              Comment

              • llove530
                Daycare.com Member
                • Jan 2011
                • 23

                #8
                I have a friend that does this. How would anyone know if she is paid in cash ?

                Comment

                • TomCopeland
                  Business Author/Trainer
                  • Jun 2010
                  • 3062

                  #9
                  Not Licensed

                  Some people do cheat on their taxes. The IRS might find out about this if: the parents claim the child care tax credit and the provider is caring for more than 6 children (parent not allowed to claim credit in this situation); a child is injured; licensing finds about the person; another provider turns in the person to the IRS.
                  http://www.tomcopelandblog.com

                  Comment

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