Posted by Tom Copeland in CCR&R Blog on 4/12/2018

2017 Tax Changes Affecting Family Child Care Providers

* The standard mileage rate for 2017 is $.535.

* The standard meal allowance rate for 2017 (and 2018) is: $1.31 breakfast, $2.46 lunch/supper and $.73 snack. Use these rates for all meals and snacks served in 2017 (including meals and snacks not reimbursed by the Food Program). You may deduct up to one breakfast, one lunch, one supper and three snacks per day, per child. No food receipts are necessary when using this rule.

* Providers may deduct in one year (rather than depreciating) items that cost more than $2,500 that they purchased in 2017 before September 28, 2017. This excludes a home, deck, or home addition.

* Providers may deduct in one year (rather than depreciating) items they purchased in 2017 that cost less than $2,500. Providers must include the following written statement with their tax return indicating they are electing this rule.

“Section 1.263(a)-1(f) De Minimis Safe Harbor Election

Your name _________________

Your address __________

EIN or Social Security Number __________

For the year ending December 31, 2017 I am electing the de minimis safe harbor under Treas. Reg. Section 1.263(a)-1(f) for my business expenses of less than $2,500.”

* The 50% bonus depreciation rule has been extended to 2017. This rule allows providers who purchased new furniture, appliances, playground equipment, fences, patios, office equipment, and home improvement to deduct half of the normal depreciation in 2017.

* The income limits to qualify for the IRS Saver’s Credit has increased to $61,000 (adjusted gross income) for couples filing jointly and $30,500 for individuals or married people filing separately.

* The IRS has relaxed the rules defining what is a repair (deduct in one year) vs. a home improvement (depreciate over 39 years). Repairs may now include replacing a few windows or doors, installing a wood or tile floor and replacing roof shingles.

Providers may contact Tom with questions about these tax changes or other business questions at 651-280-5991 or tomcopeland@live.com. Tom does not charge anything for answering questions.

 

Tags: Tom Copeland, taxes, tax updates, tax

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