A child care provider writes:
> Do I need to add up how much I spent on personal food for last year?
You do not need to add up the amount spent on food for yourself and your family, but there remains the question of whether you should save your personal grocery receipts.
Child care providers who calculate the food deduction on their tax return based on the standard meal allowance rates do NOT need to save any grocery receipts...not for business food or personal food...except for grocery store receipts that include non-food business purchases (paper towels, etc.).
On the other hand, if you calculate your food deduction based on actual grocery cost (or if you might want to do so), you should save ALL grocery receipts and ALL receipts from restaurant meals, both business and personal. You don't have to do anything with the personal receipts at tax time, but you should save them during the year.
If you do end up claiming a food deduction on your tax return based on actual grocery cost, preserve your personal grocery/restaurant receipts AND your business grocery/restaurant receipts with your tax records in case you are audited. That way you can show the auditor that you didn't count any personal food in with your day care kids' food. Many auditors won't allow your full business food cost as a deduction, unless you can also show having purchased personal groceries.
If you purchase personal and business food on combined grocery store receipts, that's okay, as long as you have some method for determining how much food was eaten by your child care children. Save the receipts so that an auditor can see that you didn't try to deduct the total amount you spent on groceries.
Last updated 1 August 2010
Posted on 2010-03-03 07:06:04