At the tax seminar I attended they said that 'toys and equipment' used by your children after hours would fall under the 'shared expense' so you could write off the % your daycare is open and the other % is for the personal use of the children. If it is something you bought specifically for the daycare and is not used for the children during personal time - aka not age appropriate for them or whatnot than track those materials / toys separate and write off 100% as a daycare expense.

I buy extra wipes for 'daycare use' / toilet paper / Kleenex specifically for storage in the daycare space when I am at Costco and put it on a separate receipt. For cleaning things like bleach, vinegar, paper towels, the upstairs bathroom kleenex boxes and toilet paper and also paper towel for the kitchen on my normal groceries with the daycare stuff and it gets factored into the shared expenses cause the kids do use that bathroom too and the cleaning of the 'house' is a shared expense.

For calculating your square footage it is only 'living space' that you are allowed to calculate as used - so yes no furnace area / laundry / closets / bathroom even though you might actually need and use those to do business they are not allowed to be counted in the square footage used for business because the children are not really spending any quantity time in there.

The challenge with 'self employed taxes' is that the bottom line is we can right off any 'reasonable expense required to do our business' .... it is very GREY what reasonable can be determined is - the bottom line to choose to write off something or not is A) what is normal practice in your industry and B) regardless of what everyone else is doing do YOU feel you could argue in an audit that a 'questioned' expense was reasonable for your business!

So for example - the front door to our house when I opened the daycare was perfectly great shape however it had no window ... during my first 6 months in business I had several accidents where clients knocked and opened the door at the same time and took the skin off of fingers of children getting dressed for outside in my foyer ... for liability reasons I felt I needed a WINDOW in the door so that parents could SEE we were there because locking the door all the time was not an option, having to get up and answer the door meant time not supervising the children and so forth - we replaced the door and I wrote off almost 100% of that cost (I upgraded to a fancy stain-glass that i did not write off) but some would argue replacement of the door is a home improvement and NOT business - however I would NEVER have incurred the expense if not for the business and have documentation on accidents to prove this. Same with our front porch 'cracked' and we had to replace that as well cause if it fell and dropped on a child's foot - liability therefore business expense as well.

For your steam cleaner - I would write it off for sure ... IMU if it was under $250 (double check that is still the cut off amount) you can write the whole thing off if it was more than $250 than it is 'depreciated' over the course of 5 years.

I agree - I HATE tax time and trying to decide what you can and cannot write off ... I am one who likes to air on the side of 'caution' however if I am absolutely sure I have a valid argument and documentation to prove than I will write it off for sure!