Taxation of Daycare Providers

CPAs, EAs, CRTPs

It is estimated that over 130,000 daycare businesses employ almost one million workers in the U.S. Most of these businesses have five or fewer employees, and many are sole proprietorships run out of the owner’s home. Many daycare providers are unaware of, or simply misapply, the somewhat confusing tax rules to which they are subject. This course guides the practitioner through the tax complexities, focusing on the proper determination of deductions, so that you may be better positioned to identify the issues and help your client minimize tax burden and the chance of non-compliance.

• Identify different types of daycare providers
• Identify the standards by which an expense is classified as a business deduction
• Understand which types of property qualify for depreciation deductions, as well as rules for determining basis
• Determine sources of business expenses such as business related travel, payments for food and toys, start-up costs, and business use of home
• Identify when a daycare provider can consider bad debt as an expense
• Understand rules for paying wages and compensation to all levels of employees, including family members and independent contractors, as well as classification of payments made to the business owner