This year is the 10th anniversary of the IRS adoption of the standard meal allowance rule.
This rule allows family child care providers to claim food expenses without having to keep any food receipts.
Child care providers using this rule can deduct up to one breakfast, one lunch, one supper, and three snacks per day per child. These meal counts include meals reimbursed by the Food Program as well as those not reimbursed by the Food Program. Non-reimbursed meals do not need to be nutritious.
It’s important to keep a daily record of each meal and snack served to each child, each day.
For 2012, child care providers can deduct $1.24 for each breakfast, $2.32 for each lunch or supper and $.69 for each snack. This standard rate is based on the Food Program’s higher Tier I rate as of January of each year.
Using the standard meal allowance rate is voluntary. You can instead choose to deduct the actual cost of your food by estimating its cost using your food receipts. If you use this method you must keep all business and personal food receipts. My book Family Child Care Record Keeping Guide lists five different ways to estimate your food costs using this method.
For more on the standard meal allowance rule, see my article.
How This Rule Came to Be
I was responsible for getting the IRS to adopt the standard meal allowance rule.
Before this rule was adopted, I saw many family child care providers struggle with having to keep all their food receipts. Estimating the business cost of their food was difficult and providers usually did not have adequate records when audited by the IRS. I did not enjoy having to explain the complicated ways to deduct food expenses at my workshops.
I proposed this idea under an IRS program that looked at ways to reduce the record keeping burden of tax payers. Many providers and child care organizations contacted the IRS in support of this idea. I talked with the IRS on several occasions about how such a standard meal allowance rule might be implemented. The IRS estimated that this rule would save providers across the country over one million hours of record keeping time.
The standard meal allowance rule was welcome news in the family child care community. The vast majority of providers now use this method rather than estimating their actual food cost. Some providers tell me that their food deduction is now higher than their food expense.
The IRS was extremely happy with the acceptance of this rule by child care providers. They invited me to come to Washington, DC to participate in a panel discussion about this rule during a satellite television broadcast to IRS agents around the country. It was fun for me to spend time in the IRS headquarters! I can understand if you wouldn’t feel the same way as I did!
It was very satisfying for me to be a part of creating the standard meal allowance rule.
Tom Copeland – www.tomcopelandblog.com
Image credit: ourlittlegroupfamilydaycare.com
For more information about the standard meal allowance rule, see my book Family Child Care Record Keeping Guide.