I have a client who is a photographer (mainly weddings and special events). She has a 2-yr old son who needs care both while she is shooting and while she is editing. She estimates that she needs 1200 to 1400 hours of child care this year alone. Are there any legitimate ways she can make this a business deduction? I'm thinking -- make the babysitter an employee? The photographer has a studio separate from her home, and in the studio she has one extra, totally unused room that could be converted into a child-care space. If she actually employed the babysitter, and provided the major area of care within her studio (even though the sitter could take the kids to activities and maybe even to her own home on "outings"), would that qualify for a legitimate business deduction? If it could be structured as a legitmate business expense with the baby-sitter as an employee, is there any way the photographer could pay the babysitter as an independent contracter instead of as an employee (much as she pays other photographers who assist her on various shoots), issuing a
1099-MISC? The photographer is currently a sole-prop.; would it make any difference if the business was incorporated as an S-corp? Would the value of the child care service be imputed to the photographer on her w-2 anyway? Currently, my thoughts are that babysitting is a personal expense and only the first $3000 of it can qualify for personal deduction on her 1040. But I told her I would ask for opinions from you folks to see if anyone could suggest a creative, yet legal and legitimate, way of making this a business expense. Thanks, Elizabeth Brennan, EA