2 Family Child Care Tax Companion
Locating Tax Professionals in Your Area
Once you make the decision to work with a tax professional, the next step is finding the
right person. First of all, it’s extremely important that your tax professional understand
the special tax rules that apply to family child care businesses. Here are some sugges-
tions to help you find a tax professional who is familiar with your type of business:
• Visit my blog (www.tomcopelandblog.com) and look up your state in the directory of
tax professionals who have experience doing family child care tax returns. (I don’t
recommend any specific tax professionals.)
• Contact one of the three national tax organizations that offer state listings of their
professional members: the National Association of Enrolled Agents (www.naea.org
or 202-822-6232), the National Association of Tax Professionals (www.natptax.com
or 800-558-3402), or the National Society of Accountants (www.nsacct.org or 800-
966-6679). You can also look in the phone book for the local chapter of any of these
organizations. • Ask other family child care providers or members of your family child care associa-
tion if they can recommend a good tax professional in your area.
• Call the IRS at 800-906-9887 to find out if there is an IRS Volunteer Income Tax
Assistance (VITA) site close to you. This program offers free tax help for taxpayers
with household incomes under $50,000. VITA volunteers are trained to help prepare
basic tax returns in sites across the country. Since some VITA sites don’t prepare
business tax returns, be sure to first ask if a site prepares returns for family child care
businesses. • Find out if there are any community tax resources that you are qualified to use. For
example, some communities have taxpayer assistance services for low-income people.
For more information about these programs, contact your local United Way.
You might also be considering a commercial tax preparation agency; however, most of
these businesses focus primarily on tax returns for wage earners rather than home-based
businesses. In addition, a tax professional at one of these agencies may be unfamiliar
with the unique tax rules that apply to family child care. If you’re considering a tax
preparation service, ask whether the person who will be doing your return has had any
recent training on tax returns for home-based businesses—and be prepared to explain
the tax rules for family child care to your preparer.
By following the above suggestions, you will probably be able to collect the names of
at least a few tax professionals. Because of the nature of your business, you can’t neces-
sarily assume that any experienced tax professional will be able to prepare your return
correctly. Once you have collected your referrals, the next step is to ask each profes-
sional about his training and credentials. Ideally, you are looking for someone who is an
enrolled agent (EA):
• An EA has earned this credential from the IRS by passing a test in tax preparation.