Taxes
Taxes

Tax Information and Sites

When Beginning to organize your tax records:

	Organize a work area where you can do your record keeping.
	Select a convenient method for storing your records, such as a portable file box, or a small file cabinet.
	Use a notebook, ledger, calendar system or financial software to record income and expenses.
	Store receipts in labeled envelopes. Keep deductible receipts as well as non-deductible. This will give you proof of non-deductions in case of an audit.
	Set a regular time each day or week to record business information. Complete a monthly summary at the end of each month.

You are required to keep your business records and receipts for three years from the date you file your tax return.

Here is a partial list of direct expenses that are possible tax deductions…

	Food (including infant formula)
	Toys, games, and arts and crafts supplies
	Transportation (mileage) or car maintenance
	First aid supplies
	Laundry and cleaning
	Office supplies
	Bank charges on business account
	Legal and bookkeeping assistance
	Insurance (health, liability, disability)
	Advertising
	Association dues
	Childcare related conferences or classes
	Personnel (owner and substitute salaries and fringe benefits)
	Cost of training for extra childcare, such as special needs children
	Some direct costs, such as large toys, small appliances, bedding, office and safety equipment, may last longer than one year and may be considered as an expenditure over a number of years. If an item purchased for the operation of your business costs more than $100 it can be depreciated, check with the IRS to see whether they consider the item a three-year, five-year, or ten-year property. The tax deductions will be calculated over a period of years.

Some examples of indirect expenses are as follows…

	Mortgage or rent,
	Utility payments,
	Property taxes,
	Maintenance and repairs,
	House insurance,
	Household supplies and toys, and
	Cable TV

Indirect expenses are not usually 100% deductible but a portion of these expenses can be figured by using a time/space calculation where time and space are defined as follows…

TIME – Hours of operation, set up and tear down time, cooking,, cleaning, exterior maintenance each week, record keeping, lesson planning and pre cutting craft projects and computer time. All time counted must be time spent in your home.

SPACE – the square footage of your home used for your daycare. Almost all of you use 100% of your space.

Be prepared with this information when preparing your taxes.

After you get organized you will need to file your taxes. You may do this quarterly or annually, with a CPA, tax service or by yourself. It is usually a good idea to have your taxes prepared at first to ensure that you file the proper forms. H & R Block offers this service and usually have staff experienced in filing home daycare taxes.

The following are some helpful links and phone numbers…

Barton Black CPA

(972) 727-2829

Benchmark Tax Consulting

(972) 527-4047

C.J. Wilson PC

(972) 690-8890

Diversified Tax Solutions

(972) 361-4060

The IRS

http://www.irs.gov/

The Professionals Income Tax

(972) 625-7548

Jane Spears CPA

(972) 530-9663

Volunteer Income Tax Assistance Program (VITA)

The VITA Program offers free tax help to low- to moderate-income ($37,000 and below) people who cannot prepare their own tax returns. Volunteers sponsored by various organizations receive training to help prepare basic tax returns in communities across the country. VITA sites are generally located at community and neighborhood centers, libraries, schools, shopping malls, and other convenient locations. Most locations also offer free electronic filing. To locate the nearest VITA site, call 1-800-829-1040.

Tax Information and Sites

Volunteer Income Tax Assistance Program (VITA)

Send mail to danielle@kidsncaregivers.com with questions or comments about this web site. Copyright © 2001 Kids 'n Caregivers

Send mail to danielle@kidsncaregivers.com with questions or comments about this web site.
Copyright © 2001 Kids 'n Caregivers