As a baby sitter who provides child-care services in return for compensation, you can deduct certain expenses that are aligned with the daily operations of your business. Whether you provide baby-sitting services in your home or travel to other locations, you will incur certain expenses that are incidental to carrying out your daily work responsibilities.
If your baby-sitting business requires you to travel away from your home for temporary work assignments and client visits, you can deduct expenses related to your travel. The same is true if you have to drive a child to music lessons or other activities as part of your business. You will need to discern the location of your tax home, which is the entire city or general location of your main place of business. Your main place of business may be your home office or other location where you regularly operate your business. You may deduct the cost of meals, lodging and travel if you spend more than an ordinary day of work in the location.
Commuting expenses from home to work are generally not deductible as a business expense. But if you operate your baby-sitting business in your home and use a portion of your home as your home office, you can deduct expenses that you incur while traveling from your main place of business, which is your home office, to other workplaces and clients' homes. If your main place of business is a separate location than your home, you can deduct commuting and travel expenses from one workplace to another, but you can't deduct travel expenses from your home to your main place of business if you do not operate your business in your home.
Home Office Expenses
If your home is used for your business -- if you use a part of your home for child-care services -- you can deduct certain expenses related to the business use of your home. Your home office must be considered your principal place of business and you must regularly operate your business in your home. You can deduct the cost of equipment and supplies used for your business, such as meals for children, toys, educational supplies and other items used to operate the business. You may also deduct utilities but only the costs associated with operating your business -- a portion based on the percentage of your home used exclusively for business.
If you advertise your baby-sitting and child-care services, you can deduct your advertising expenses as long as the costs are related to your business as a child-care provider.