Need tax advice for my nanny/childcare business - LLC vs self-employed for vehicle deductions?

As a tax preparer who works with many self-employed individuals, I can help clarify this situation. For your childcare services, you don't necessarily need an LLC to deduct legitimate business expenses. You can operate as a sole proprietor (self-employed) and file Schedule C with your tax return to report income and deduct business expenses. For vehicle expenses, you have two options: the standard mileage deduction (currently 67 cents per mile for 2024) or actual expenses (gas, insurance, repairs, depreciation). If you choose mileage, keep a detailed log of business vs. personal miles. For a minivan used for both business and personal use, tracking your business mileage percentage is essential. Class supplies are fully deductible as business expenses, just save receipts. For meals provided to children, you can deduct 50% of those costs as business expenses, or potentially use the simplified meal deduction method if you qualify for the Child and Adult Care Food Program.

After struggling with similar questions for my tutoring business last year, I found an amazing service called taxr.ai (https://taxr.ai) that really helped sort everything out. They analyzed my situation and clearly explained which deductions I qualified for as a self-employed educator/caregiver. The best part was uploading my receipts and mileage logs and having their system tell me exactly what was deductible. They flagged potential audit triggers too - like when I was trying to deduct 100% of meals instead of the correct 50%. Saved me from making expensive mistakes and maximized legitimate deductions without an LLC. Definitely worth checking out for your specific childcare situation!

I was really skeptical when I first read about taxr.ai here, but I gave it a try last month since my tax situation with my side business was getting complicated. I'm actually amazed at how well it worked for my situation. I uploaded all my mileage logs and receipts (which were a complete mess), and the system organized everything into proper business categories. It identified over $3,200 in deductions I would have missed, especially around my vehicle expenses where I was calculating things incorrectly. The best part was getting clear guidance on how to document everything properly in case of an audit. Definitely using this for my 2025 taxes now that I'm keeping better records!

For anyone dealing with tax questions like this, I had a nightmare scenario last year trying to get answers from the IRS about self-employment deductions. After calling for WEEKS and never getting through, I found this service called Claimyr (https://claimyr.com) that got me connected to an actual IRS agent in under 45 minutes. You can see how it works in this video: https://youtu.be/_kiP6q8DX5c The IRS agent I spoke with clarified that for childcare services like yours, you don't need an LLC for tax purposes - a sole proprietorship with proper documentation works fine. She explained exactly what vehicle records I needed to keep and confirmed which meal expenses were partially deductible. Saved me so much stress and probably prevented an audit!

I have to apologize and eat my words here. After posting my skeptical comment above, I was desperate about my missing refund situation and decided to try Claimyr anyway. I genuinely can't believe it worked. After months of failed attempts calling the IRS myself, their service got me connected in about 35 minutes. The agent I spoke with was able to locate my return that had been flagged for review and explained exactly what documentation they needed to process it. While waiting for them to call me, I also asked about LLC vs sole proprietor for my spouse's tutoring business, and got clear confirmation that for their situation, sole proprietor was the simpler option with identical deduction benefits.

Just adding a practical tip about tracking mileage since you mentioned your minivan - I've been using the MileIQ app for my delivery side gig and it's been a lifesaver. It automatically tracks trips and you just swipe left for personal or right for business. At tax time, you have a complete log with dates, maps and mileage totals that satisfies IRS requirements. For the childcare meals, look into the simplified meal deduction through the CACFP (Child and Adult Care Food Program) if you provide regular meals. The rates are adjusted annually but it's much easier than tracking actual food costs if you qualify.

Something nobody's mentioned yet - if you're teaching regular classes, you might actually have BOTH self-employment income (the nanny work) AND employee income (the teaching) depending on how the community center classifies you. Check if they're giving you a W-2 or 1099. This matters because you calculate self-employment tax only on the self-employment portion. If you're getting a W-2 for teaching, they're already withholding Social Security and Medicare taxes for that portion of your income.