Schedule C Explainer - IRS Schedule C: Understanding Business Deductions Using Schedule C for Sole Proprietors

Sep 19, 2026

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Family child care providers use IRS Schedule C to report business income and claim qualifying deductions for expenses connected with operating a home-based child care business. Guidance explains what belongs in Part I (income such as payments, subsidies, and grants) and Part II (business expenses, including carryovers from Form 8829 and 100% business costs). The tips also outline common deduction categories and recordkeeping requirements using receipts, checks, statements, written logs, or photographs.

LanguageEnglish

CategoryLetters

FormatPDF

Pages1

AccessFree to download

IRS Schedule C Overview

Business Income (Part I)

Business Expenses (Part II)

Common Deductions

COVID Re-opening Expenses

Meals, Mileage, and Auto-Related Costs

Adequate Records for Claims

Family Child Care Home Provider Tax Tips IRS Schedule C: Understanding Business Deductions Using Schedule C for Sole Proprietors January 2021 Child care is a business. For Family Child Care providers, there are tax benefits to claim related to operating a business out of your home. When an expense is related to your business, report it using IRS Form Schedule C. You may also carry over “shared expenses” from IRS Form 8829, which is used to calculate expenses partly used for business purposes and partly used for personal purposes (see the one page explainer for IRS Form 8829) . IRS Schedule C in Brief. The IRS Schedule C Form is related to the profit and loss of your business. • Under Part I of Schedule C is where you report your income (payments from families, any government payments such as child care subsidies paid to you for the care of low income children, or other payments from other sources such as any grants you may receive from a state agency) . • Under Part II of Schedule C is where you list your business expenses. Some of these may be carried over from IRS Form 8829 (such as rent or mortgage interest), which reflects expenses shared between business and personal purposes. Other expenses can be listed here which are 100% business expenses – for example, PPE and cleaning supplies used for your business during COVID-19 (gloves, masks, disinfectants, thermometers, sanitizers, room dividers, deep cleaning services, air filters, etc. ) . Common Deductions Reported on IRS Form Schedule C Playroom expenses (toys, books, etc. ) Child furniture, cubbies, organizers Bathroom towels, soap, toilet paper Garage freezer Curriculum & art supplies Re-opening Expenses (COVID) Laptop, printer, paper Meals & snacks (special rules) Mileage (special rules) Parking, tolls, business % of auto loan Expenses Need an“Adequate Record” • Receipt • Cancelled check • Credit/debit card statement • Written record • Photograph Tom Copeland: [http://tomcopelandblog.com/checklist-for-irs-schedule-c-profit-of-loss-from-business](http://tomcopelandblog.com/checklist-for-irs-schedule-c-profit-of-loss-from-business)

FAQs

What is IRS Schedule C used for by family child care providers?

It is used to report profit and loss for a business and to claim deductions for expenses related to operating child care from home.

What items are reported under Part I of Schedule C?

Part I is for business income, such as payments from families, government child care subsidies, and other grants or payments.

What types of expenses belong in Part II, and how does Form 8829 relate?

Part II lists business expenses, including items that may be carried over from Form 8829 for shared business/personal use. Some expenses must be 100% business, such as PPE and cleaning supplies used for the business.

Sep 19, 2026

Upload by Fahsai