During this time of year, I receive many phone calls from family and group family providers asking for advice on how they should organize and prepare their records for tax season.
My first piece of advice is for providers to assess their situation. Are your records organized? By this, I mean have you created files for the different types of expenses and income sources you have? Do you have other important information ready to give to your tax preparer? For example, do you know the square footage of your house or apartment along with the square footage of the area you use in the home to care for the children? Have you kept track of the hours you have cared for the children and the other hours you have been doing business related things in the home? Do you have records of household expenses available, i.e. the electric bill, mortgage, rent payment receipts, property taxes, etc.? There is a lot of information a tax preparer will need to be able to prepare your taxes properly.
My second piece of advice is to shop around for a tax preparer. In order to make an informed decision, it is important for child care providers to know something about how their tax return is prepared. That information could make it easier for you to determine if the tax preparer you choose is competent. Interview the tax preparer. Ask them how many in-home daycare tax returns they have prepared. The business of in-home child care is very specialized and the tax preparer you choose must have a good knowledge of all the special laws and tax rules that apply to the field of in-home daycare. Even though the tax preparer has a big job to do, so do you. Make sure you come prepared with everything he/she asks for, and are able to quickly respond and answer any questions they may have, or information they may need.
My third piece of advice is to take the class, “Tax and Business Record Keeping” offered by Child Care Resource Network on Saturday, October 28, 2017. Not only will we go over some of the most common questions and issues faced my in-home child care providers come tax time, but we will also have a tax professional from H&R Block to answer all of your questions in real time. We’ll use the information to strengthen your business record keeping systems and ensure you’re ready to go this tax season.
Last but not least, you can call me at Child Care Resource Network so that we can sit down and discuss your personal needs when it comes to tax preparation. I can sit with you and discuss the steps you can take to prepare for your visit to your accountant/tax preparer. In the meantime, here are some resources I recommend to in-home child care programs:
IRS Webinar
Child Care providers Learn Tax Rules
https://www.irs.gov/newsroom/child-careproviders-learn-tax-rules-with-irs-webinar
Information and Materials
Tom Copeland’s Taking Care of Business
Record Keeping Systems Computerized
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