Category Archives: Business Deductions

Checklist of Deductible Supplies

Deductible SuppliesChild Care Provider Checklist of Deductible Supplies

Checklists make life easier.  Lists that are for your specific business are even better. Use our Checklist of Deductible Supplies to make your life a little easier – and it’s in word or PDF format.

If you use it in word, you can customize it with your business logo and print out one for each month.  Take 12 plain manila. straight-edge, file folders, make one for each month (for example,  January 2015 Deductible Supplies, February 2015 Deductible Supplies, and so on).  At the end of the year, you have a handy record of all your related purchases and corresponding receipts in one folder.  Make sure you check back for checklists for the kitchen and repairs & maintenance.

Click on the image below and it will download a word document that you can customize to your specifications.  For a PDF version, click HERE.

Checklist of Deductible Children's Supplies

 

IRS FORMS   Exclusive Use Rule   POLICIES  & PROCEDURES   Checklists, Mail & Mileage Logs   IMPORTANT TAX DATES   Articles & Books   GLOSSARY OF TERMS   Childcare Provider  BLOG   US-TaxLaws.com BLOG  Crime Prevention and Emergency Handbook
Home Fire Safety Self-Inspection Checklist   TAX INTERVIEW CHECKLIST
Child care provider medical safety checklist   Provider Meal and Snack Log
The Baby Name Wizard

For more than 30 years R. Patrick Michael has prepared tax returns for individuals, small businesses, cottage industries and in-home child care providers. Pat is a recognized child care provider tax expert, and gives educational seminars for child care providers in San Diego County for the YMCA Child Resource Services, and he has been doing this for more than 18 years.  Pat and his team have built a following of long-term clients, family/generational clients, new meets and word-of-mouth referrals. Child Care Tax Specialists take care of their clients year-round with tax preparation, business entity creation and support, as well as tax planning for retirement, and estate planning.

NEED HELP?  CALL (619) 589-8680 TODAY!

 

Recordkeeping Health Check For Your Business

E-Book on RecordkeepingTHE SEVEN RULES OF GOOD RECORDKEEPING

I. Track income from each parent and the Child and Adult care Food Program.

II. Save the receipts for all business and personal purchases.

III. Mark what each item is on the receipt.

IV. Organize receipts by category, not month.

V. Keep track of how much time – each week – you use your home for business.

VI. Conduct a regular review (at least monthly) of your records.

VII. After filing your tax return, keep your records in a safe place for at least 7 years.

Use our e-book *Recordkeeping and Taxes* to help give you ideas.  What little time you have for administrative tasks needs to be as efficient as possible.  That means getting filing done, setting up new files, and keeping mileage logs up to date.  Receipts, don’t forget receipts.  File them by subject.

For more than 30 years R. Patrick Michael has been preparing tax returns for individuals, small businesses, cottage industries and in-home child care providers. Pat is a recognized child care provider tax expert, and has been providing educational seminars for child care providers in San Diego County for the YMCA Child Resource Services for more than 18 years.  Pat and his team have built a following that is comprised of long-term clients, new relationships and word-of-mouth referrals. Child Care Tax Specialists take care of their clients year-round with tax preparation, business entity creation and support, as well as tax planning for retirement, and estate planning.

IRS FORMS   Exclusive Use Rule   POLICIES  & PROCEDURES   Checklists, Mail & Mileage Logs   IMPORTANT TAX DATES   Articles & Books   GLOSSARY OF TERMS   Childcare Provider  BLOG   US-TaxLaws.com BLOG  Crime Prevention and Emergency Handbook
Home Fire Safety Self-Inspection Checklist   TAX INTERVIEW CHECKLIST
Child care provider medical safety checklist   Provider Meal and Snack Log
The Baby Name Wizard, CHILD CARE GUIDE on RECORDKEEPING and TAXES

NEED HELP?  CALL (619) 589-8680 TODAY!

The Child Tax Credit

Child Tax Credit and The LawTop Six Things You Should Know about The Child Tax Credit

The Child Tax Credit may save you money at tax-time if you have a qualified child. Here are six things you should know about the credit.

  1. Amount. The Child Tax Credit may help reduce your federal income tax by up to $1,000 for each qualifying child that you are eligible to claim on your tax return.
  2. Additional Child Tax Credit. If you qualify and get less than the full Child Tax Credit, you could receive a refund even if you owe no tax with the Additional Child Tax Credit.
  3. Qualifications. For this credit, a qualifying child must pass several tests:
    Age test. The child must have been under age 17 at the end of 2014.
    Relationship test. The child must be your son, daughter, stepchild, foster child, brother, sister, stepbrother, or stepsister. The child may be a descendant of any of these individuals. A qualifying child could also include your grandchild, niece or nephew. You would always treat an adopted child as your own child. An adopted child includes a child lawfully placed with you for legal adoption.
    Support test. The child must not have provided more than half of their own support for the year.
    Dependent test. The child must be a dependent that you claim on your federal tax return.
    Joint return test. The child cannot file a joint return for the year, unless the only reason they are filing is to claim a refund.
    Citizenship test. The child must be a U.S. citizen, a U.S. national or a U.S. resident alien.
    Residence test. In most cases, the child must have lived with you for more than half of 2014.
  1. Limitations. The Child Tax Credit is subject to income limitations. The limits may reduce or eliminate your credit depending on your filing status and income.

5.Schedule 8812. If you qualify to claim the Child Tax Credit, make sure to check whether you must complete and attach Schedule 8812, Child Tax Credit, with your tax return. For example, if you claim a credit for a child with an Individual Taxpayer Identification Number, you must complete Part I of Schedule 8812. If you qualify to claim the Additional Child Tax Credit, you must complete and attach Schedule 8812. Visit IRS.gov to view, download or print IRS tax forms anytime.

  1. IRS E-file. Electronic filing is the best way to file your tax return. IRS E-file is the safe, accurate and easiest way to file. If you use IRS Free File, you can prepare and e-file your taxes for free. Go to IRS.gov/filing and review your options.

You can use the Interactive Tax Assistant tool on IRS.gov to see if you can claim the credit.

If you found this Tax Tip helpful, please share it through your social media platforms. A great way to get tax information is to use IRS Social Media. You can also subscribe to IRS Tax Tips or any of our e-news subscriptions.

Additional IRS Resources:

IRS YouTube Videos:

 

Scariest Tax Errors – Forbes

CAUTION Audit Alert SignIf you aren’t using a professional tax preparer – you might want to reconsider that decision after reading this post and the articles it links to.  If you needed a reason why you would want to use a professional tax preparer – this is just what you need. If  you know someone who needs a little convincing – send a link to this post.

Let’s start with a great article in Forbes that begins, “Before you file your taxes, consider how long you must look over your shoulder.” (That’s sort of chilling, don’t you think?) They add that tax lawyers and accountants are used to monitoring the duration of their clients’ audit exposure – and so should you.  (Now really … is that something you want to do – or wouldn’t you prefer a tax professional who knows how the IRS functions?)  Here’s the article “The Scariest Tax Errors, They Extend IRS Audits To Six Years Or Endlessly.”

Compound the above with the fact that the Commissioner of the IRS publicly thanked tax preparers for “surviving a very challenging tax season“, and if he thought the season was *challenging* it’s not because it’s easy.   Safe to say the tax code is not going to get easier – so unless you have nerves of steel, do yourself a favor and research professional preparers and go talk to them.

IRS FORMS   Exclusive Use Rule   POLICIES  & PROCEDURES   Checklists, Mail & Mileage Logs   IMPORTANT TAX DATES   Articles & Books   GLOSSARY OF TERMS   Childcare Provider  BLOG   US-TaxLaws.com BLOG  Crime Prevention and Emergency Handbook
Home Fire Safety Self-Inspection Checklist   TAX INTERVIEW CHECKLIST
Child care provider medical safety checklist   Provider Meal and Snack Log
The Baby Name Wizard

 

What’s the “Cost of Cash” to Small Business Owners?

Pause ButtonDEBIT CARD? CREDIT CARD? CASH?

“Some small business owners are intimidated by the thought of accepting credit and debit card payments. And that’s understandable- with the prospect of paying fees, plus the cost of acquiring new point of sale terminals, electronic payments can seem daunting.” (SCORE ). They made some really good points, such as: Continue reading →

Start-Up Costs for New Providers

Box of ReceiptsKEEPING RECEIPTS and RECORDS

Say you started your business in 2014 – have you kept records on all of the expenses to get your business off the ground?  Let’s start with licensing expenses.  Start-up costs can get lost in the flurry of having a new business.  Child Care Providers have their very own set of start-up costs that need to be anticipated.

We are also including a Chron .com  article by Marie Huntington of Demand Media on what goes into setting  up a child care business.  Our next post will be the SBA’s tools and resources specifically about setting up a child care business.

“The increase in two-family household incomes has created a huge demand for childcare related services. Established childcare facilities generally attract parents of infants, preschool children and school-age children who are looking to place their children with daycare providers because of their need to work outside the home. According to Entrepreneur, the start-up costs for a childcare center range from $10,000 to $50,000.

Operations

The actual start-up costs for your childcare center will depend on how you choose to establish and operate your business. For instance, opting to start a childcare center in your home will be less costly than leasing or buying a building or office location. Home-based childcare centers have lower overhead costs, including rent and costs associated with building utilities and maintenance. Also, other factors to consider when ascertaining the start-up costs for a childcare center are the daycare hours; whether you choose to supply food for the children; the amount of children you plan to accommodate; how much you plan to charge; and staff considerations, such as salaries and employee benefits.

Expenses

Forbes says that the costs to start a childcare center if you’re taking over an existing facility can run at least $30,000. Forbes also reveals that supplies and equipment can costs between $300 to $400 per child. According to Self-Help.org, educational supplies and equipment can total up to $4,100. Other expenses include marketing costs, furniture and administrative expenses; Self-Help averaged the total costs for a start-up childcare center to be $83,030.

State Regulations

Every state has its own regulations regarding the requirements to become a licensed childcare provider and other requirements, such as the qualifications to legally operate a childcare facility, the teacher-to-child ratio and safety requirements for staff and children. Your state may charge fees to register as a licensed childcare center. States establish childcare regulations to protect the health and safety of children. These childcare requirements are set by the childcare licensing agency in your state.

Resources

The National Resource Center for Health and Safety in Childcare and Early Education provides information on the childcare licensing requirements for each state. Also, the National Childcare Information and Technical Assistance Center provides licensing information for each state. Other organizations that may provide resourceful information are the National Association for the Education of Young Children, National Association for Family Child Care and the National Child Care Association.

Miscellaneous costs to include

Licensing Fees (child care license, local business license)
Smoke and Carbon Monoxide Detectors
Criminal background checks
Inspection Fee – fire and building
Water testing (esp. if using well water)
Medical exams
Safety Precautions – outlet covers, safety locks, first aid kit, security gate, etc.
Toys
Training classes
Vehicle Expenses
Children activity expenses
Cribs
Playground equipment
Home Remodeling

Source: Chron.com, Forbes

ChildCareTaxSpecialists.com understands your business better than almost any other tax preparer. Why? Because their experience spans more than 25 years in the field, and more than 18 years providing seminars to the YMCA Child Resource Services Providers on taxes and recordkeeping and audits,  pro bono.  Call us at 619-589-8680.    

Changes in Circumstances Can Affect Advanced Payments of the Premium Tax Credit

Latest Breaking News

Individuals who purchased health insurance coverage from the Health Insurance Marketplace may be getting advance payments of the premium tax credit to help pay for health insurance coverage in 2014.

If they are, it is important to report changes in circumstances, such as changes in income, marital status or family size, to the Health Insurance Marketplace when they happen.

Receiving too much or too little in advance payments of the premium tax credit can affect refunds or balance due when individuals file federal tax returns in 2015.

Reporting changes will help avoid getting a smaller refund than expected or even owing money not expected to owe.

Publication 5152, Report changes to the Marketplace as they happen, is available on www.IRS.gov/aca. Go to www.HealthCare.gov for information about health insurance coverage and financial assistance.

Source: IRS.gov Newsletter

AN EDUCATED TAXPAYER IS OUR BEST CLIENT.  NEED HELP?  CALL (619) 589-8680 TODAY!

For more than 30 years R. Patrick Michael has been preparing tax returns for individuals, small businesses, cottage industries and in-home child care providers. Pat is a recognized child care provider tax expert, and has been providing educational seminars for child care providers in San Diego County for the YMCA Child Resource Services for more than 18 years.  Pat and his team have built a following that is comprised of long-term clients, new relationships and word-of-mouth referrals. Child Care Tax Specialists take care of their clients year-round with tax preparation, business entity creation and support, as well as tax planning for retirement, and estate planning.

Finished With Taxes? Not just yet.

What Should You Keep?

Med size man staring at filesNow that April 15 has come and gone – you may look at this time as an opportunity to clean up, clean out and get organized.  We will be writing about tips to freshen or set up your in-home office to help you in your recordkeeping, but before we go there… let’s talk about your tax files first and what you need to keep.

Begin by gathering all of the documents and files that you pulled together to prepare your taxes. Continue reading →

Are You Depreciating Your Household Items Correctly?

Depreciating  household items can represent a significant tax savings!

Tax Refund Ahead SignWe always meet with our new child care provider clients to check their past deductions because many times they have not properly depreciated the day-to-day materials, furniture, and household items they use in the daily operation of their business.

We want to know about these items – even if they were purchased before the business was started. These can result in considerable tax savings for you.

It’s true!  You are entitled to claim depreciation on household items that you purchased BEFORE your business was even started.  In fact, you should depreciate all the items based on the lower end of the purchase price (your tax preparer will guide you) or the of the item(s) when they were first used in your business.

The list can include: beds, linens, towels, tables, chairs, desks, refrigerator, freezer, washer/dryer … are you getting the picture.  Any of the items that you are using in support of your child care business is a legitimate deduction.  This includes little stuff too, like pictures on the wall, garden hose, tools (for use outside).

The IRS Child Care Provider Audit Technique Guide states, “For many providers, when they start their business many items that were personal use only are used in the business.  They are entitled to depreciate the business use portion of those assets.”

 

For more than 30 years R. Patrick Michael has been preparing tax returns for individuals, small businesses, cottage industries and in-home child care providers. Pat is a recognized child care provider tax expert, and has been providing educational seminars for child care providers in San Diego County for the YMCA Child Resource Services for more than 18 years.  Pat and his team have built a following that is comprised of long-term clients, new relationships and word-of-mouth referrals. Child Care Tax Specialists take care of their clients year-round with tax preparation, business entity creation and support, as well as tax planning for retirement, and estate planning.

NEED HELP?  CALL (619) 589-8680 TODAY!

How to Deduct Expenses at the NAFCC Conference in Orlando, Florida

Follow IRS rules about business travel and deductions and enjoy the trip!

Are you planning to attend the National Association for Family Child Care Conference in Orlando, Florida on July 11-12, 2014?

NAFCC2014_Poster_webThe program guide  gives you all the details about workshops and seminars that will be taking place, including valuable business practices for record keeping and general business administration of your child care business.

  • You will have the opportunity to meet keynote speakers, like Tom Copeland, who will be conducting several workshops.
  • Interface with other child care providers from around the country and see what they are doing for their business.

WHAT’S EVEN BETTER – YOU HAVE DEDUCTIONS! Continue reading →