Roseville and Sacramento Accountant for Daycare Companies
Cook CPA Group
Caring for and ensuring the health and safety of children is a job that will require you to be fully attentive to the needs of those children. If you are responsible for running a daycare for several children on a daily basis, it is difficult to then have to worry about ensuring your business stays compliant with various tax laws. If your daycare company requires assistance managing its tax liability, you should consult with an experienced Roseville accountant for daycare companies.
Cook CPA Group acknowledges the difficulty of operating a successful daycare company and ensuring that meet all required tax regulations and we are here for your business. Our team of accountants has provided tax services to businesses in Roseville, Sacramento, and across California and we would be proud to provide you with the tax accounting services that your business deserves. To schedule a free consultation to discuss your tax situation, contact Cook CPA Group at (916) 269-9281, or contact us online.
Tax Tips for Daycare Companies
Operating a successful daycare company requires dedication. You must meet the needs of all your children and also assure parents that you are their best option when it comes to childcare. It is also necessary to maintain a good relationship with state and federal tax agencies to avoid tax penalties or the possibility of dealing with an audit. The following is a list of tax tips that can help you keep your daycare company running efficiently.
Keeping Thorough Business Records
Creating a system to document all your business transactions is necessary for every business. You never want to be in a position where you are searching for tax documents to file an income tax return just days before the filing deadline. A daycare company should keep accurate records regarding all of the following transactions:
- Detailed attendance records for children in your care that document the amount of time you cared for each child down to the minutes
- Expense reports
- Bills for housing and other utilities
- Expenses for transportation used for the benefit of the children
- Money used to provide food and beverages to children and money used to reimburse those expenses
- Invoices for other daycare services
This is not an exhaustive list. You should organize your business records in a way that is easy to understand just in case you have any issues with the Internal Revenue Service or California’s Board of Equalization.
Claim Tax Deductions
A daycare company can claim several tax deductions depending on the circumstances. Tax deductions are used to lower your tax liability by lowering your taxable income. If you operate your daycare business out of your home, you may be able to claim deductions that are related to your household expenses. For example, the IRS may permit you to claim a deduction on a purchase like toilet paper that you obviously would have to buy without running a daycare business out of your home.
It is also important to note that daycare companies that operate out of a home may claim a home office deduction. The home office deduction is for taxpayers that have a home office that they exclusively use to conduct business. For example, if a room of your home is used just for daycare activities, you may be eligible for the home office deduction.
Other common tax deductions that you can claim include:
- Child-related supplies like toys, games, books, music, eating utensils, and other similar items
- House depreciation
- Property taxes
- Necessary home repairs
- Advertising fees
- Daycare activities like field trips
- Gifts for daycare children
Running a daycare company out of your home can also make you eligible for the Department of Agriculture’s Child and Adult Care Food Program. This program reimburses daycare companies for meals needed to feed children that are enrolled at the daycare. If you are approved for this program, you should be careful about claiming any other deductions regarding meals.
Operating a daycare company will mean that you must pay self-employment taxes. This tax is collected to pay into your Social Security retirement programs like Medicare. If you do not pay your self-employment taxes on a quarterly basis as required by the IRS, you may be issued a large tax bill.
Cook CPA Group offers a variety of financial services that can be utilized by a daycare company:
- Financial statement audits
- Business consulting
- Tax preparation and planning
- Tax audits
- Estate planning
If you believe your business would benefit from working with a certified public accountant, our firm is here for you.
Sacramento Daycare Company Accountants that You Can Trust
If your daycare company needs help complying with tax regulations, you should contact an experienced Sacramento daycare company accountant. At Cook CPA Group, our accountants possess decades of combined accounting experience, and we would be proud to use that experience to benefit your daycare company. To schedule a free consultation to discuss possible tax strategies, contact Cook CPA Group at (916) 269-9281, or contact us online.