When this rule was introduced in early 2013, the new rule allowed for family child care providers to claim up to $1,500 in house expenses on their 2013 tax return, without being required to produce receipts, (IRS Rev. Proc. 2013-13).
Recently, the IRS updated this ruling, and we feel even stronger now that for the vast majority of our child care provider clients this rule is not in their favor and we will not be using it. We can confidently say that most, if not all, of our client’s deductions exceed the limit of $1,500.00.
Our best advice is if you are not one of our clients, call us at 619-589-8680. Otherwise, we urge all child care providers to seriously question any tax preparer who encourages you to use this deduction, unless you completely understand how it will impact your return. Once done, you can’t amend this portion of your tax return. You are locked in.