Category Archives: Record Keeping

Critical IRS Deadlines in the Year 2014 – June through December

300X250 Focus Blurb AdNow is a good time for you to do a mid-year health check on your record keeping and tax status.

Give us a call at 619-589-8680 and let’s set up a time for you to come in.

June 2, 2014

Deadline for financial institutions to send out Form 5498 to report balances in an individual retirement account for the year 2013.

June 16, 2014

2nd quarter estimated tax payments due for the 2014 tax year. (The normal deadline is June 15th, which falls on a Sunday, so the deadline is pushed to the next business day.)

Deadline for US citizens living abroad to file individual tax returns and to pay any tax due. You can request an additional 4-month extension (Form 4868). (You can request an automatic extension by April 15th instead if you want to.) Two tax breaks important for Americans working abroad are the Foreign Earned Income Exclusion and the Foreign Tax Credit, .

June 30, 2014

Deadline to file Foreign Bank Account Report for the year 2013. This report is required if you have over $10,000 (in aggregate) held in foreign bank accounts. Foreign Bank Account Reports have a new form number (FinCEN Form 114) and must be filed electronically. Extensions of time to file are not available.

September 15, 2014

3rd quarter estimated tax payments due for the 2014 tax year.

Final deadline to file corporate tax returns for the year 2013 if an extension was requested. (Forms 1120, 1120A, 1120S).

Final deadline to file trust income tax returns (Form 1041) for the year 2013 if an extension was requested.

Final deadline to file partnership tax returns (Form 1065) for the year 2013 if an extension was requested.

October 1, 2014

Final deadline for self-employed persons or small employers to establish a SIMPLE-IRA for the year 2014.

October 15, 2014

Final deadline to file individual tax returns (with extension). (Forms 1040, 1040A, 1040EZ.)

Last day the IRS will accept an electronically filed tax return for the year 2013. If filing after October 15th, you’ll need to mail in your tax return for processing.

Final deadline to fund a SEP-IRA or solo 401(k) for tax year 2013 if you requested an automatic extension of time to file.

November 2014

Start planning any year-end tax moves.

December 1, 2014

If you are covered by an HSA-compatible health insurance policy as of December 1st, you’ll be eligible to contribute the full amount to a Health Savings Account for the year.

December 31, 2014

Last day to make any tax moves for the year 2014. Last day to set up a solo 401(k) for self-employed persons.

Marital status on this date determines your marital status for the whole year.

Source: Income Tax Deadlines; Critical IRS Deadlines in the Year 2014

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 →

Your Special Rule for Children of Divorced or Separated Parents

Baby Only Facing RightHow should you handle parents who are divorced or separated when it comes to providing receipts?

As a good practice, we advocate our child care providers issue receipts whenever they are paid.  Do you have to do this?  No, it just makes your record keeping easier.

The question here is when you have a child in your care, whose parents are separated or divorced, which parent do you give the receipt to?  The short answer : you only give a receipt to the person who actually paid you. Make it one of your business rules, and let parents know (and include in your program materials).

But what do you do if you find yourself in a situation where one of the parents comes to you and says they have been paying the other parent for your child care services… and they need the receipt to declare it.  Advise the parent that they will have to speak to the other parent because you only issue receipts to someone who has directly paid you and they will have to speak to the other parent if they are planning to claim a child care tax credit.

What happens if both parents, separated or divorced, have paid you.  If you have kept a register of who paid when, then add it up and give each parent a receipt for the amount they paid.  If you didn’t keep it separate, then, according to Tom Copeland, “give each of them the same receipt and mark “Duplicate” on each receipt”.

For more information about on this read Child and Dependent Care Expenses,

Free Childcare Forms Promote Best Practices

Practicing good communications includes good forms!

During our last seminar series for the YMCA Childcare Resource Services, our attendees expressed an interest in best practices and tools.  We always reference Tom Copeland as an excellent source of information, and we are pleased to turn you on to another valuable site that has free forms that you can easily download and customize for your childcare business.

To begin, how would you rate your communication skills?  We know you have to be effective working and caring for children – but how about communicating with the parents?  Do you routinely sit and talk with the parents?  Do you have a printed handbook that discusses your business policies, rules, and other practices?

ccl-logoThe Child Care Lounge  has all the materials to help you assemble a professional handbook with the type of information exclusively for childcare providers.

First you will see Printable Contracts, and they include:

Then scroll down to the Printable Parent Letters and Forms.  There you will find, in PDF and word format:

And then on to Progress Reports, Employee Forms, Promotional Signs, etc.

Remember this – when you have a *handbook* you are communicating how you conduct and handle your business.  Your clients will value your professionalism and attention to detail.  You and your employees will benefit by establishing levels of expectation in performance and practices.  Think of it as a foundation.  Don’t forget to check out our Checklists, Mileage Logs and other forms .

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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!

 

 

 

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!

Communicating Your Child Care Business Policies

SHOULD YOU CREATE A  POLICY HANDBOOK FOR YOUR CHILD CARE BUSINESS?  ABSOLUTELY!

Baby with Blue ShoesIt is your responsibility to communicate your policies in your business.  Clients will appreciate the information, and creates a basis of communication between you and the client.  It establishes how you conduct your business, and gives parents an “inside look” of what to expect in your performance.  It also lets them know what is expected of them. Continue reading →

HOW and WHEN TO RAISE YOUR RATES

Does talking about rate increases with your client make you uncomfortable?

Child Care Tax SpecialistsYou’re not alone.  Many child care providers feel awkward talking about rates and fee increases with their clients.  However, just as many of your clients get annual reviews and increases in their job-related compensation, it isn’t unreasonable for you to need to adjust your rates if only to meet inflation.

If you prefer not to increase your rates across the board, maybe just one of your specialty services might be appropriate, such as infant care.  Those clients who rely on you to care for their infant, understand the demands are greater with infants, and are more likely to understand paying more for it.

So what is a reasonable increase?

I always stress in my Taxes & Recordkeeping Seminars for the San Diego Chapter of the YMCA Child Resource Services, that child care providers cannot discuss their rates with other child care providers.  It’s against the law.  If you need guidance in determining what is a fair rate based on your regional market, consult with Child Resource Services in your area.  In San Diego, you would contact Child Resource Services, YMCA of San Diego County.

You will want to consider how often you should raise your rates.  Best practices says to not raise them more than once a year, but refrain from locking yourself into that by not putting any rate limiting information in a contract.  Things change, and you want to stay as flexible as possible.

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 →

At-A-Glance Child Care Tax Document and Resource Center

Child Care Tax Center

Baby with Blue ShoesPublication 587 – Business Use of Your Home (See Day Care Facility)
The purpose of this publication is to provide information on figuring and claiming the deduction for business use of your home. It contains special rules for day care providers including standard meal and snack rates. Continue reading →