Taxes

I am a home daycare provider too. We have a great accountant. His wife is also a home daycare provider. He figured out how much extra to have come out of my husbands checks each month so that we get a small refund each year. If you are interested in our accountants name feel free to contact me and I will get you the information.

Are you asking as a day care provider? If so, then if you're licensed, I strongly suggest joining a food program. There are a number available, and if you want to email me, I'll be happy to talk to you about making a choice. But they're all going to reimburse you for a portion of what you spend to feed the kids, in exchange for meeting certain dietary guidelines. The other thing is that most of them will provide you with free software to track the meals, but it also does your accounting. There are a lot of things to consider, such as your "space-time percentage," which has to do with how much of your home-related expenses you can deduct, and it helps to figure them all out.

My husband does not do day care, so we've just arranged every year to have a little extra taken out of his check. And for three years, we haven't had to pay anything. It's worked out well for us. I would also recommend that, at least once, you see an accountant. We use one every year, but at the least, he or she would be able to help you with what you need to keep track of and what to consider when doing your taxes. I know ours has always thought of deductions we hadn't thought of, saving us at least the cost of his fee.

I also recommend that you get a tax ID number so that you don't have to hand out your social security number. It's easy to do, and I'll be happy to talk with you more about that too, if you have questions.

Good luck. Taxes are confusing!

I know self-employed people who pay their income taxes quarterly. I would find a good accountant/tax person to work with on this.

I won't go into great detail, but I ran into some complications when doing my taxes this year because I (the mom) was not on the same page as the provider. When a parent goes to file their taxes, they will need your full name, street address, and social security # or tax i.d.

I would also keep track of what each family pays you, and you should do a quick check with each other at tax time to make sure you agree on the amount. (It might be best not to wait until year end--perhaps you could check with each other each quarter? I see no harm.)

I have a small in home daycare and I am not licsensed. I used Excel for everything. I record all the payments from my families and make receipts for them, and make other documents for my taxes. Save ALL your reciepts! You can deduct actual food costs or use the IRS standard meal allowance, costs of toys and other supplies, you can also deduct a portion of your utilities, mortagage/rent... I reccommend you go to a tax professional (I use HR Block) at least the first year so you can maximize your deductions and also if you want to pre pay your taxes quaterly they can figure that out for you too. If you go to the IRS website and do a search for daycare/childcare provider it have a 30page doc you can print out that tells you how to figure out deductions and things. I also reccomend you get an EIN number (its a kind of tax id) so you don't have to give you SS# out to people (you can register online on the IRS website.

I could tell you tons more but if you can questions just send me a message.

Good Luck,
M.

First off, I always purchsed "Forms, Facts, and Figures" from Wild Wood Resources. It is a great record keeping system that allows room to record each child's hours, a mileage log, expense log, and gives you a tax form that you give to each family at the end of the year! IT was the BEST investment I made for saving me time on this part of the job. Phone number is 1-800-359-9453 or their website is www.wildwoodkidstuff.com

The info that you need to give to the parents is your name, address, social secerurity number OR tax id number, and the total amount that they paid you throughout the given year. You ARE expected to give parents the total paid amount!!! You need it for your taxes anyway so it's really easy to just hand that info over to the parents as well.

As for paying taxes. I had to pay in every year. I don't know how it's possible to only start paying in AFTER 7 YEARS...... Daycare pays really well if you can keep a good roster. I paid in quarterly so it wouldn't be such a huge shock at the end of the year. I would definitely call a tax person and see if they will just tell you over the phone what they suggest for you. If they won't, I suggest you go consult with one in person at least one time so you get professional advice on this one.....

Make sure to keep receits for EVERYTHING!!! And write down mileage. You get to deduct a lot when you do daycare. Toys, food, equipment, etc. Anything you buy that daycare uses can get deducted. That is like your "benefit"...LOL.

Check out RedleafPress.org then click on Tax Time on the left side of your screen. They have a lot of books that are very helpful in my opinion. I have been a licensed provider for the past 6 years and use them for my business. Good luck.

Chances are you won't have to pay in, but that is not a guarantee. This was the first year in 8-years that I had to. Figure out the percentage that you think you will need at put it away if you are worried.

Legally you do not have to provide the parents with the amount, but most will want it and you will want to to make sure you both have the same amount that was paid. There is software and forms for an official form, but you don't have to have this. You will also need to provide them with your ss# or a taxpayer id#, so I would recommend applying for the taxpayer id# so you don't have to give out your SS.

There is A LOT of work involoved with the taxes (in my opinion) and you need to keep track of EVERYTHING! I am pretty good at imputing all my information at the end of each month and I still have work to do at tax time.

You will also have to have someone do your taxes and you will want to find someone who is experienced in doing taxes for a daycare. I would not recommend just picking someone out of the phone book or even using H&R Block. This is very important!

There are several classes and boods offered by Tom Copeland if you need to learn about it all. I was lucky enough to have a Mom who has done daycare for 20+ years so I could go to her for all my questions.

Again, once you take the class through your county, you will learn about a lot of this.

Are you thinking about going into day care? If so, you can contact me and I am willing to give you tons of information on starting a family day care.

____@____.com

Renee