Meals and Car Expenses

[sergio417]

I'm a bookkeeper for a in home daycare and ive been recording the meal expenses based on the receipts that I get from the business owner every month and matching it to the bank transactions. She tell me that expenses for food should be higher because she provides lunch and snacks for some of the children. she doesn't have record of saying she fed the children that day except for the contract on some of the parents where she states that she will provide food for them. she also has attendance records. she wants to estimate the amount but I tell her that's not how it works. based on the standard meal allowance it allows an amount per meal and snack. my question is about the record keeping. she only has attendance and contract statements about meals. now is this enough for auditors?

also car depreciation. she already had a paid car when she started the business. so its not a new purchase. also not a new car. its maybe 10 years old or more. so can it still be depreciated?

[Cat Herder]

Tom will probably answer you soon.

In the future, keeping meal count forms will help her. https://www.pdffiller.com/46786803-c...Fillable-Forms

[TomCopeland]

meal and car expenses

I'm a bookkeeper for a in home daycare and ive been recording the meal expenses based on the receipts that I get from the business owner every month and matching it to the bank transactions. She tell me that expenses for food should be higher because she provides lunch and snacks for some of the children. she doesn't have record of saying she fed the children that day except for the contract on some of the parents where she states that she will provide food for them. she also has attendance records. she wants to estimate the amount but I tell her that's not how it works. based on the standard meal allowance it allows an amount per meal and snack. my question is about the record keeping. she only has attendance and contract statements about meals. now is this enough for auditors?

also car depreciation. she already had a paid car when she started the business. so its not a new purchase. also not a new car. its maybe 10 years old or more. so can it still be depreciated?

If the provider uses the standard meal allowance method there is no need to save any food receipts. Simply multiply the number of meals/snacks served by the standard rate. Will contract info and attendance records pass IRS muster in an audit, without daily records showing how many meals/snacks she served? Probably not, but maybe, depending on the auditor. For 2018 she could now reconstruct the number of meals and snacks served and get each parent to sign her report saying that they know that their child was served the number of meals/snacks in the report. Parents will know what meals/snacks their child got. The provider should start tracking these servings daily going forward. If she does this for 2019 and 2020, and is audited for 2018 will the parent statements, I'd guess that her chances of winning are very high.

Yes, she can depreciate the old, paid off car based on its fair market value at the time she first started using it for her business. This assumes she is using the actual expenses method to claim car expenses and she understands that if she uses this method she can't shift over to the standard mileage method in later years for that car.

[sergio417]

thank you Tom

thank you tom for the information.
now I use QuickBooks to record expenses and revenue as you know. since I am making an adjustment on expenses once we figure the number out for meals should I record this expense at year end 2018 or go back month by month and record it there ? or is this not recorded here and just provided to the tax accountant?

is there a link to where I can find out how much to depreciate the car each year?

thank you again

[sergio417]

I replied to this on the next reply. I didn't see the option to do it right here until now.
but thanks Tom