Tuesday, March 24, 2009
Standard Meal Allowances...
Are you aware that you can claim food expenses on your taxes, but do not need to go through the hassle of saving receipts and adding up totals for the year? Family child care providers may choose to use a standard meal allowance rate to claim food deductions instead of keeping detailed records and food receipts. This can greatly reduce the amount of recordkeeping that is needed if you choose this option.
Providers can use the standard meal and snack rates for a maximum of one breakfast, one lunch, one dinner, and three snacks per child per day. Any extra meals or snacks beyond these amounts may not be counted when using the standard meal allowance rate. The rule does not give guidance on what constitutes a meal or a snack. Providers can count meals even if they do not meet the nutrition requirements of the Food Program.
Who Is Eligible?
All family child care providers are eligible to use the standard meal allowance, whether or not they are licensed, registered, or otherwise regulated by their own state or locality. This includes unregulated providers, providers receiving subsidy from their state to care for one or more low income children, and even illegal providers. Providers who are not on the Food Program may also use this method of expense tracking.
So what is the rate? For 2008, you can deduct:
The key point to remember is that you have a choice in how to claim your food expenses. You can use this standard meal allowance rate or deduct your food expenses using the actual cost of the meals. You can even switch back and forth from year to year. You may want to estimate the actual food cost per child per meal that you incur and compare it with the standard meal allowance rate. If your actual food cost is greater, perhaps you should continue to save all business and personal food receipts. Figure out which method works best for you!
Are you aware that you can claim food expenses on your taxes, but do not need to go through the hassle of saving receipts and adding up totals for the year? Family child care providers may choose to use a standard meal allowance rate to claim food deductions instead of keeping detailed records and food receipts. This can greatly reduce the amount of recordkeeping that is needed if you choose this option.
Providers can use the standard meal and snack rates for a maximum of one breakfast, one lunch, one dinner, and three snacks per child per day. Any extra meals or snacks beyond these amounts may not be counted when using the standard meal allowance rate. The rule does not give guidance on what constitutes a meal or a snack. Providers can count meals even if they do not meet the nutrition requirements of the Food Program.
Who Is Eligible?
All family child care providers are eligible to use the standard meal allowance, whether or not they are licensed, registered, or otherwise regulated by their own state or locality. This includes unregulated providers, providers receiving subsidy from their state to care for one or more low income children, and even illegal providers. Providers who are not on the Food Program may also use this method of expense tracking.
So what is the rate? For 2008, you can deduct:
- Majority of the States:
Breakfast $1.11
Lunch/Supper $2.06
Snack $0.61 - Alaska:
Breakfast $1.76
Lunch/Supper $3.34
Snack $0.99 - Hawaii:
Breakfast $1.29
Lunch/Supper $2.41
Snack $0.72
- You cannot count meals if the parent of the child suupplies the food. If the parent only supplies part of the meal, you might be able to claim a portion of the meal allowance rate, but use your own reasonable judgment about whether to claim a portion of the meal allowance rate.
- If the actual cost of food purchased as part of an activity, rather than as a meal or snack, it may be counted as an activity expense at actual cost, rather than as a standard meal food expense. This will often provide a larger deduction. For example, the cost of a cake served at a birthday party or the ingredients of a gingerbread house can be deducted separately. You should use best judgment to determine if a food expense should be counted as a meal or an activity expense.
- To use the standard meal allowance rate, you must maintain records that include the names of the children in your care, the dates and hours of attendance, and the number of breakfasts, lunches, suppers, and snacks served. You can use any record keeping system that you prefer, such as Food Program monthly claim forms, sign in and sign out sheets, parent contracts, and other methods. The most difficult record to keep is probably hours of attendance. Although the IRS log asks providers to track this on a daily basis, if you keep reasonable attendance records and your meal counts are not inconsistent with these records, you should not have a problem if audited. (Again, you should probably check with your tax preparer and their recommendations.)
The key point to remember is that you have a choice in how to claim your food expenses. You can use this standard meal allowance rate or deduct your food expenses using the actual cost of the meals. You can even switch back and forth from year to year. You may want to estimate the actual food cost per child per meal that you incur and compare it with the standard meal allowance rate. If your actual food cost is greater, perhaps you should continue to save all business and personal food receipts. Figure out which method works best for you!
// posted by Tammy Wachter @ 6:07 AM 
