What is Need to be Consider in Home Daycare Business Tax Payment
When we are open up the home daycare business then we also need to consider about the tax obligation. It is important since the tax will bring impact toward our business if we do not prepare for it earlier. In fact, we are required to pay the tax each year. If we already run our business for a year then we will order to pay the tax in quarter. We have two kinds of taxes to fulfill in running home daycare business. The first one is the traditional taxes and another one is self-employment taxes. It is a kind of our employer will pay in the medicare system. There are a lot of taxes to pay. That is why we need to at least prepare 25 percent of our income per month and keep it for paying taxes in each year end. However, we are possible to deduct taxes from many kind of daycare supplies that we used to run our home daycare business. The only thing that we should do to get deduction from our taxes is that keeping all of our purchases receipt correctly. Any kind of supplies like toys, food, learning supplies, advertising cost, home repair and even our home space that used for the child care business can be included into tax deduction. If we can properly safe it into our record, we can simply put it into our tax annual payment. A lot of benefit that we may get from this including the less payment of taxes which is very important to run our home daycare business.
We are not a professional so we may need an accountant help to fulfill the tax form for our home daycare business. The accountant will also helpful to find out how much we should pay each quarter and how to do our taxes form. It is better if we can hire an accountant to help us doing the taxes every year. Just be sure that we are also allocating some fund to pay the accountant since we have to calculate each expense that we make form our home daycare business. The problem arises when we do not have sufficient fund to hire accountant. We can simply looking for tax software in online source and we can fill the tax form on our own. There are many kind of small business tax software that we can download and help us to fill the taxes form. Home daycare business urges us to pay the taxes in quarter to IRS. The quarter period itself because we are a kind of self-employed individual child care provider. IRS itself has some kind of calculator to count the amount that we should pay each quarter. We can simply use this calculation to know how much we should pay or simply count based on the amount that we have to pay last year. Usually the period of tax payment will be 15 of June, 15 of September and 18 of January. We can simply pay the tax for our home daycare business through mail or online.
Home daycare business is a small unit of daycare business. However, we also need to do many kind of things including tax payment like other business has. Dealing with the tax payment, it is better if we can make a statement letter about our tax payment to the parents of children of our home daycare business under our supervision as a report their payment part. On the statement letter there are our social security number or employer identification number that we can simply get form the IRS. Commonly, it will need around 2 weeks to get this number. The statement itself will be great if issued in the end of January. The statement that we issued will be used by the parent that using our home daycare business services to deduct the childcare expense from their tax. The statement is important to provide toward parents since many parents will need it to take flexible spending account at their workplace to pay for the child care expense. This kind of spending account usually taken by parent who does not have a lot of money to simply pay the cost by themselves. In fact, we have to admit that home daycare is less expensive than other type of daycare so we need to cooperate with the parent so that we can help each other with the taxes. So start earlier with our record keeping. Make sure that we have all the record for the daycare supplies expense including any maintaining or repair cost for our home space that used for home daycare business to make us easier dealing with the tax.