6 Family Child Care Tax Companion
• The books in the Redleaf Press business series. You may also find the answer in
Redleaf Press books, especially the Tax Workbook and Organizer for the relevant tax
year and the Record-Keeping Guide. You can order any of these publications from
Redleaf Press by calling 800-423-8309 or visiting www.redleafpress.org.
Resolve Differing Interpretations
Sometimes there won’t be any written documentation for a point you are disputing with
your tax professional. For example, there is no written authority that specifically states
whether your toothpaste, your garden hose, or the service contract on your refrigerator
is deductible. The best documentation you might be able to find is the Tax Code, sec-
tion 162(a), which says that expenses that are “ordinary and necessary” in your business
are deductible. This may leave you arguing with your tax professional about whether the
item that you want to deduct really is “ordinary and necessary” to your business or not.
When there is no definitive answer, there’s no simple answer to differing interpreta-
tions. After discussing this with your tax professional, you may decide to rely on her
judgment—or your tax professional may agree to do it your way.
Remember that in the end, you are the one who is responsible for what is on your tax
return. If the IRS audits you and denies any of the deductions you have claimed, it is
you—not your tax professional—who will have to pay any extra taxes and penalties that
may be due.
When to Look for Another Tax Professional
When you have disagreements with your tax professional, do everything you can to work
them out. Take the time to ask questions, and listen closely to the explanations. Look for
a written authority, and consult outside help if necessary. If you feel strongly that your
position is correct or you just aren’t comfortable with your tax professional, eventually
you may want to consider switching to a different tax professional.
There are many family child care tax issues that are subject to legitimate differences
of opinion. I do not suggest that you switch tax professionals over minor disputes. When
it comes to major issues—for example, if you feel that your tax professional isn’t asser-
tive enough, or is too assertive for your comfort—don’t be afraid to move on. You may
want to do your own tax return (using the Tax Workbook and Organizer as a guide) for
a while, or you can begin gathering referrals and then conduct interviews for a new tax
professional. COPYRIGHTED MATERIAL