CHILD CARE MANUAL

2010.045.05.20 Deductions from Self-Employment Income

When possible, use the previous year’s tax forms to verify self-employment expenses.

The following overhead expenses are allowed as deductions from gross self-employment income.

  1. INCOME FROM BOARDERS – Food Expense – allow the monthly Food Stamp issuance amount for a one person household per each boarder.
  2. INCOME FROM CHILD CARE SELF EMPLOYMENT – Meals – Allow $1.00 per child per meal provided, unless meals are deducted as an expense on the tax schedules, in which case, use the meal deduction from the tax schedule.
  3. INCOME FROM SALES – The cost of operation of a vehicle (current state reimbursement rate), and the cost of supplies (as paid).
  4. JOB RELATED COSTS – If the individual has costs associated with furnishing his/her own tools, equipment, transportation, etc., allow the expense, as paid, as a deduction.
  5. FARM INCOME – The cost (as paid) of feed, seed, fertilizers, tools, equipment repair and replacement, labor, cost of operation for farm machinery, shipping costs, custom work, and land rental or ownership costs.
  6. BUSINESS INCOME – The cost (as paid) of tools, equipment repair and replacement, labor, cost of operation of equipment, purchase of materials, supplies, or stock of goods, rental or ownership costs and utilities on separate business establishment, and subcontracting cost.
  7. INCOME PRODUCING PROPERTY – Cost (as paid) of ownership (mortgage or contract payment, taxes, insurance, repairs), utilities, labor, and supplies.

Enter all self-employment expenses in the eligibility system.