• Title XX Income (state pays for low income families)
• Food Program Income (state or private organization reimburses food expenses)
• Co-pay (some families that receive state assistance must pay for a portion of their daycare)
• Private Pay (daycare expenses paid with no government assistance)

Option 1: Figure how many of each were served in the current year:

• Breakfast
• Lunches/dinner
• Snacks
• No food receipts needed
• Count extra snacks that may not have been reimbursed by the food program

Option 2: Actual Expenses (must have receipts)

• Total all food receipts
• Deduct any personal expenses for food

Option 1: Standard Mileage (no receipts needed)

• Business miles driven must be documented (include transportation to and from: homes, school, field trips, grocery store, etc)
• Total business miles
• Total all miles

Option 2: Actual Expenses (must have receipts)

• If you take actual expenses you must continue to take actual expenses
• You can not switch from actual to standard mileage on the same vehicle
• Business and Total miles driven must be documented (the percent of business miles driven will be deductible)
• Total receipts for each of the following: Gas, Repairs, Maintenance, Licenses/Taxes, Insurance

Side note: A receipt is needed to verify any of the following expenses; remember it is not necessary to bring in the receipts but you must present them if the IRS requests them. The more organized they are the better the chance of the expense not getting disallowed in an audit.

• Advertising (phone book, newspaper, website, etc)
• Bedding (blankets, sheets, nap mats, pillows, etc)
• Big Ticket items (will usually last longer than a year and will include items such as baby beds, toddler beds, televisions, playground equipment, computer, etc)
• Continuing Education (conferences, CPR classes, etc)
• Education (books, games, crayons, crafts, etc)
• Field Trips/Parties (skating, zoo, circus, supplies/decorations for holiday parties, birthday parties, etc) (you must deduct any amount the child paid for the event)
• Gifts (per person limit)
• Insurance (liability)*
• License/Fees
• Medical (prescriptions, physicals, band aids, etc)
• Office Supplies (paper, pens, toner, computer supplies)
• Paper Supplies (plates, cups, silverware, toilet paper, paper towels, etc)
• Rent/Lease*
• Repairs/Mtce (repairs on daycare building or home necessary for operation is 100% deductible, general repairs on home partially deductible)*
• Safety/Security*
• Temporary Help
• Toys
• Utilities (Gas, Electric, Cable, Telephone, etc)*
• Mortgage Statement (for Interest, taxes & Insurance)

• Total Square Footage of Home
• Square Footage used for daycare
• Total # of hours home was used for the daycare
• If you do not have children 24 hours but are licensed 24 hours you only count the time when the first child arrives until the last child leaves. Do not count weekends if you do not watch children on the weekends