Monthly Archives: May 2013

IRS Expands Relief to Child Care Providers Who Hire Assistants

Do you pay someone to help you care for children in your family child care business?  Are you treating them as an employee or independent contractor? Unfortunately, if you have not treated your workers as employees you run the risk of facing stiff penalties and interest if audited by the IRS – and the IRS can go back three years. This means you should have been withholding Social Security/Medicare taxes, paying federal and state unemployment taxes, and purchasing workers’ compensation insurance. Continue reading

Seven Record Keeping and Tax Tips for the New Provider

Family child care providers are self-employed taxpayers who must report their business income and expenses to the IRS.  Record keeping is essential in any business – but for child care providers, the devil is in the details.  It is important to become familiar with all of the IRS requirements for filing your taxes. To help you prepare for this, here are seven record keeping and tax tips to help you as you start your new profession. By following these tips you will be better able to organize your records, claim the maximum legal deductions, and reduce your taxes.

IRS Tax Court Accepts a Time-Space Percentage of 93%

Just finished reading about Time-Space Percentage client case of Tom Copeland’s. It is a great example of why recordkeeping is so vidmate important for child care providers.  The child care provider was audited – and determined – to owe $37,000.  After an unsuccessful appeal process, the provider contacted Tom Copeland.  Because the provider kept meticulous records, receipts, and other important documents, the case was revisited and settled for a fraction of the original determination.  Instead of $37,000 – the client ended up owing $4,466.  So, in addition to keeping detailed and accurate records, the other really important thing is to have a professional tax preparer – who understands your business and your expenses – completely.

Each year, Pat Michael holds a 3-hour seminar at the Mission Valley WYCA in San Diego on Tax and Recordkeeping a section on how to accurately calculate your time-space percentage, and suggested practices in recordkeeping.  Sign up for our blog to keep up on latest news and developments, and read Tom Copeland’s article IRS Tax Court Accepts a Time-Space Percentage of 93%.