As we gear up for tax season, we know how crucial it is for family childcare providers like you to have the right tools in place for stress-free financial management. That’s why we’re here to share valuable tax tips and helpful solutions!

Note: This article is presented for information purposes only. Always consult a tax professional when filing your taxes.

Tax Tip 1: It’s Not Too Late to Get Started

Haven’t been keeping up with your expenses? There’s still time to get organized. It can feel overwhelming, so take a moment to stop, take a deep breath, and let it out slowly. You’ve got this.
Gather your receipts and make a plan. Commit to inputting your expenses a little bit at a time. With KidKare Accounting, you can add expenses all the way back to January 2023 (and beyond). Categorize each one to ensure you are reporting the correct expense on the correct form.

Tip! Keep copies of your receipts even after you add them to KidKare. They are important expense records, too!

Once you’re done, all you have to do is print reports, such as Schedule C Expenses and Form 8829, directly from KidKare. Provide these reports to your tax professional or, if you are doing your own taxes, transfer the numbers to your return. Tax professionals love our reports!

Enhance your Tax Season with this Q&A Video featuring Mohamed Aalen, our go-to Childcare Tax Expert, and the incredible Charles H. Green, our trusted Childcare Lending Expert.

Tax Tip 2: Work Hours When Children Aren’t Present & Your Time-Space Percentage

Do you track all of the hours you are working? Cleaning, doing paperwork, running your billing, tracking your expenses, and more count as work hours, too. 

In fact, the average number of hours that family childcare providers work after children are gone is a staggering 13.9 hours a week*. 

Your Time-Space percentage is the proportion of your home that you use for business purposes. This figure lets you know how much of your shared business and personal expenses can be deducted as a business expense. To determine this, you have to multiply your Time % by your Space %. Learn more here.

Since Time-space percentage is calculated using your time and the space used in your home for business, if you’re leaving your children-not-present hours out of the equation, you could be leaving a lot out of your home business tax deductions. Whether you track with accounting software, on a spreadsheet, a Word document, or even on paper, track every hour spent on your business.

Tax Tip 3: Every Expense Counts!

When you run a small business, every tax deduction matters, which means every expense counts. Every. Single. One. You should be tracking expenses for items used in your business throughout the year so you can get the most out of your childcare business tax deductions. 

What sorts of items could you deduct? Here’s just a few:

• Software
• Toys
• Pots & Pans
• Silverware
• Food
• Vehicle Mileage
• Furniture
• COVID-19 Supplies (Gloves, Masks, Disinfectants)

Have you gone to the grocery store lately? You could claim mileage for that trip. However, more than 50% of the food you purchase must be for your home childcare business. Other business-oriented trips could include field trips, trips to the bank, and so on.

With KidKare Accounting, you can easily track mileage and other vehicle expenses. The Vehicle Deduction Comparison report gathers all this data into one, easy location. Your accountant will thank you! There’s a lot more you can do as far as vehicles and mileage for your business. Check out Civitas Strategies Early Start article 2023 Standard Mileage Rate Announced to learn more.

Remember! Items are only deductible if they are actually used for your business. Consult a tax professional for more information. 

Tax Tip 4: How software can help!

By utilizing software to organize your finances, you’re setting yourself up for a smooth tax season. With just a few clicks, you can generate comprehensive reports containing all the necessary information your tax professional needs. From income statements to expense breakdowns, these reports ensure that tax preparation becomes a breeze. Say goodbye to hours of manual paperwork and hello to efficiency with software-enabled organization!

Try us free for 30 days and cut down tax season stress. You’ll quickly find out why Tom Copeland named us the nation’s leading family child care record keeping online software program.

Learn more about Parachute, here.