Tax time has come and gone but are you prepared for the year ahead? Do you set aside funds for tax payments? We asked the fans of OwnADaycare on Facebook who are daycare owners tips for how they handle their tax payments and whether or not they set funsd aside or had some other method for saving for taxes. Here are some of the best responses:
- Make an appointment with a CPA to look over your books. It really depends on your circumstances. In home or not, food program or not etc. I am able to deduct ALOT of items so we do not set aside much at
- I don’t set anything aside. We have additional money withheld from my husband’s checks to cover the taxes. So instead of claiming married with 2 for withholdings, we claim marries with 0 and more is withheld.
- If you have kids and a husband that works, set aside NOTHING for the first year. I am on year number 5 and still get money back from taxes. If you are single with no kids, then it is about 1/3 of income.
- I put 25-30% aside, just in case. I have not yet had to pay anything, being doing daycare for 2 years, and we always get money. It is nice to move that saved money from my business savings account into my personal on the day I do my taxes and then still get a big chunk of change back from Uncle Sam. Talk to an accountant who knows daycare and them help you decide what is right for you.
- Get a calendar keeper from Red Leaf Press, for starters. Find classes that deal with how to run your daycare. You should have deductions for years as u build your daycare such as toys, books, supplies, posters, crayons, etc. as well as home improvements, home maintenance and the list goes on.
- Keep every single receipt (grocery bills, gas, supplies etc.) with a tax computer program (e.g. minute menu has that option). Also, I have asked my husband’s employer to take a little extra out of every check just to make sure we are in the clear, and we always are. We also use an accountant that I take my records to every 3 months.
- My tax advisor said 12% of my profits (i.e. tuition I bring in). The average you should set aside is 10% . I do mine yearly. If you have a business ID number you need to file quarterly.
- There are lots of deductions you can use. Food, miles or gas for car pick one use it every year. Office supplies, books, magazines, any classes you take that apply to teaching in the children in your age group.
- I put 25 % of my income away for taxes. I have been doing daycare for 7 years. I have never had to use the money for taxes. I use the money to pay for my tax account and usually owe a little on city and sometimes state but always get money from federal. It’s nice to have that big savings account at the end of the year to help pay bills off and stuff.
- Tom Copeland has really good books on everything you need to know tax wise for day care. Go to the Red Leaf Press web site to find them. You need to be careful picking an accountant, not all of them understand day care taxes; they are not the same as other home businesses.
- I have honestly put nothing aside. I have a business account where all my income and expenses are taken out of. Other than that I don’t touch it. This is my first year, and I am so afraid of Uncle Sam that I work a second job to pay my bills. (This is my first year in business) so I am hoping I have enough in the bank come tax time. After my first tax season, I will have a better idea and be more comfortable with paying myself.
- If you incorporate, your daycare pays you every month. Plus if you do daycare out of your house daycare pays rent, and a % of electricity, water, phone only if you have a second line, etc. Get some Tom Copeland books or look him up on Facebook.
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