My recent webinars about the significant 2018 tax changes that affect family child care providers has overshadowed the tax changes for 2017.
Below are the highlights of these new changes for 2017. I’m doing a webinar on this Tuesday, January 23rd called: “2017 Tax Updates for Family Child Care.” This one-hour webinar starts 8:30PM Eastern Time.
The webinar is sponsored by The National Association for Family Child Care and costs $25 for members and $40 for non members. If you can’t listen live, you can register and listen later to the recorded webinar.
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 after 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.
* Under certain circumstances providers may be able to deduct fences/patios/driveways and home improvements in one year, rather than having to depreciate them.
Tom Copeland – www.tomcopelandblog.com
Image credit: https://www.flickr.com/photos/41639606@N06/