Category Archives: Record Keeping

Childcare Provider Workshop January 23 San Diego

 CHILDCARE PROVIDER WORKSHOP ON TAX & RECORDKEEPING

On January 23rd there will be a tax & recordkeeping workshop in San Diego and is a must-attend for individuals who run their own childcare business. You will learn how to save thousands of dollars by proper recordkeeping practices and techniques.  This workshop is packed with information you NEED to know!  The location is the YMCA Child Resource Service at 3333 Camino Del Rio South suite 400 San Diego, CA (Mission Valley).  Call 619-521-3055 to register.  The YMCA charges a $15.00 fee.  It’s well worth it! Continue reading →

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 →

Tax Advantages You Need to Keep In Mind

Small CCP teaching children

 

ChildCareTaxSpecialists.com  (CCTS) is always looking for informative content to help you with your in-home business.  The fact that your business of child care has the greatest opportunity to maximize deductions for your home business, makes it all the more important.

[CCTS Says: before you start to read, you might want to take a look at our FREE GUIDE The World of Child Care Providers Taxes & Recordkeeping.  You will also want to check out our FREE checklists and templates for keeping records. All of our documents are free, downloadable and toner friendly.  Just click here.] 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.    

When not to use Time-Space Percentage

Don’t Guestimate Your Taxes

Tom Copeland wrote a great piece for National Association for Child Care (NAFCC) that is worth sharing with you.

“How much of the cost of an item can I deduct as a business expense?” is a common question of family child care providers. In general, providers should use their Time-Space Percentage to determine the portion that is deductible for items used by their business as well as their family. Such items include property tax, mortgage interest, furniture and appliances, toys, supplies, and more.

For some shared business and personal items, however, the Time-Space Percentage should not be used. These special items, called “listed property,” include a computer, printer, copy machine, fax, television, VCR, cell phone, and vehicle. For these items providers must calculate an actual business use percent, which means determining what percent of each item was used in the business.To read the rest of the article visit NAFCC.

January 24, 2015 T&R Workshop Flyer for YMCA CRSDon’t forget to register to attend our Tax & Recordkeeping Seminar on January 24.  Details for registration here.

 

 

So, You Are Being Audited. Now what?

FINAL October 2014 Audit Seminar FlyerJust finished an article in Entrepreneur Magazine.  It is a columnist sharing his experience and *lessons learned* going through an audit.  He thought he kept good records, but discovered there is always room for improvement.

Every year I give seminars exclusively for the child care provider community through the YMCA Child Resource Services.  The entire purpose of these seminars is to give providers the best tools and tips that will help maximize their deductions, and improve their record keeping skills.This year the Audit Seminar is on Wednesday, October 22, and includes a free workbook handout of our  “Secrets to Survive an IRS Audit”. Continue reading →

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.