 I am an Enrolled Agent in private practice since 1995 in Fremont, California. My first job out of college was as a software engineer, followed by some years when I stayed at home with my two sons. I am now a self-employed tax professional working with family child care providers all over California from my home office in the San Francisco Bay Area.
Enrolled Agents have been tested and licensed by the Department of the Treasury. We prepare tax returns and also represent taxpayers before the Internal Revenue Service. If you receive a notice or are audited by the IRS, my Enrolled Agent credential allows me to work directly with IRS personnel on your behalf to resolve things in the best possible way for you.
I specialize in working with family child care providers because I enjoy it and because people in your profession have a need for specialized care. Most tax professionals (even experienced ones) are unfamiliar with the nuances of day care taxes. I see many tax returns with both large and small errors that cause the provider to pay more tax than she should or leave her in a risky position in case of an audit. In the beginning, I started out with a number of child care providers as clients. Now I restrict new business to family child care providers only. Please read on for some pointers that will help you get off on the right foot with your record keeping and be ready for tax time. ...
New child care providers have much to learn about managing their businesses. Become well acquainted with the essential Redleaf Press publications by Tom Copeland. From a tax perspective, your main focus should be getting a good record keeping system into place and taking time to process your receipts and other paperwork every week, every two weeks, or at least monthly. Don't leave it to the end of the year when the task will be overwhelming. I highly recommend Minute Menu Kids record-keeping software which is designed specifically for family child care providers. It is based on the popular Calendar-Keeper system from Redleaf Press. Try the Calendar-Keeper or a simple envelope record-keeping system, if you prefer to do your record keeping by hand. Careful tracking of your expenses will help to keep your taxes as low as possible. Even if you haven't started caring for children yet, keep track of the expenses involved in getting your business started. Besides tracking expenses, you need a system to track and document all of your time. This means time working in your home either caring for children or doing other business-related activities. The more time you document, the higher the amount of your home expenses (rent, mortgage interest, utilites, etc.) you can deduct on your tax return. That translates into paying less tax. Take a look at my Day Care Record Keeping 101 quick reference guide for more record-keeping suggestions. (This full color graphical document takes a minute or so to download with a high speed connection. California providers please contact me if you would like me to send you a printed hard copy.) New providers should do a household inventory before the end of the year. This will allow you to take a tax deduction based on the value of your household furnishings and other personal property as of your business start date. Using the Redleaf Press Inventory-Keeper will help you do a thorough inventory and save the most tax. Established providers who never did any inventory may still benefit from doing one now. Please see my Child Care Providers Should Take a Home Inventory posting for more information.
I work with child care providers in a comprehensive fashion to prepare your tax returns for the current year and get you set up with estimated tax payments for the coming year. Business owners must generally make estimated tax payments during the year to cover their tax liability or risk ending up with a large balance due at tax time and potentially also an “underpayment penalty.” The underpayment penalty is in place because the government believes in a “pay-as-you-go” system and does not want you to wait until April 15 next year to pay your income and self-employment tax. (See my Family Child Care Tax Return Overview handout for more information regarding the type of taxes that apply to your income.) Sometimes the income tax withholding from a spouse’s wages will cover a provider’s taxes, but often it does not. Please let me know if you need help in projecting your tax for this year and calculating quarterly payments.
Effective client communication is a high priority for me. I stay in touch with clients throughout the tax preparation process. All tax professionals are loaded with work at tax time, but I try hard to avoid being overloaded. Good communication is essential for accurate tax preparation. If your current tax preparer is unresponsive or late in producing completed tax returns, that is really unacceptable and not just the nature of our business. Such a situation is not in your best interest. I complete most tax returns within three weeks, if not sooner, and I keep clients informed when there are unavoidable delays. I work in partnership with child care providers to arrive at the best tax return result and keep you in compliance with all tax laws and free from audit worries. My fees are not the lowest around, but neither are they the highest. I believe you will find my fee well spent in terms of tax savings, errors prevented and time taken to answer your questions and educate you on child care tax issues. I take a $200 deposit at the time I start work on a tax return and collect the remainder of the fee on completion. I accept cash/check and also debit/credit cards though my Payments page. Read my Frequently Asked Questions for more specific fee information. I am not interested in being a "hard sell," as I know that not everyone who contacts me will become a client. Wherever you go for tax preparation, I encourage you to find a tax professional who understands your business. See my post on How to Find a Tax Preparer. And remember, the cost of preparing your business tax forms can be deducted as a business expense!
Please visit my Newsletter page and sign up to receive the child care tax news emails I send out a few times per year. Every email gives you the ability to alter your subscription or opt-out altogether. Good luck with your business. There can be an overwhelming number of things to deal with and learn about in the beginning, but it gets easier.
If I can be of service now or in the future, please do not hesitate to email me or call me toll-free at 800-616-1268. (Outside California call 510-745-7275.) Sincerely,
Alison T. Jacks, E.A. P.S. Here is some additional information which you may find helpful: Alison's Frequently Asked Questions Child Care Tax Return Checklist, a list of the information needed to prepare a family child care tax return. Child Care Business Licenses Start-Up Costs Time/Space Percentage Calculation
Day Care Record Keeping 101, a quick reference guide for family child care providers. (This full color graphical document takes a minute or so to download with a high speed connection. California providers please contact me if you would like me to send you a printed hard copy.) How to Find a Tax Preparer Payroll Tax Guide for Daycare Providers Handouts: Family Child Care Tax Return Overview Family Child Care Tax Deductions Envelope Record-Keeping Method for Child Care Providers Handouts in Spanish: Spanish Family Child Care Tax Return Overview Spanish Family Child Care Tax Deductions Spanish Time/Space Percentage Calculation And don't forget the wealth of information published by Tom Copeland and mentioned at the top of this article.
Last updated: 30 April 2010 |
