• Visit my blog (www.tomcopelandblog.com), which contains a state-by-state directory
of tax preparers who have experience doing family child care tax returns. (I don’t
recommend any specific tax preparers.)
• Ask other family child care providers or the members of your family child care
association for the names of their tax preparers.
• Find out if there are any community resources you can use. For example, some com
munities have taxpayer assistance services for low-income people. Contact your local
United Way for more information about these programs.
• There are three national tax preparer organizations that offer state listings of their mem
bers: 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), and the
National Society of Accountants (www.nsacct.org or 800-966-6679). You can also look
in the phone book to find the local chapter of any of these organizations.
Using Tax Preparation Software
An increasing number of family child care providers are using tax preparation software
to do their own taxes. The two leading tax preparation software programs are H&R
Block at Home and TurboTax. Both programs are available on disk or can be used online
and offer special instructions for family child care providers. These programs can be
helpful in doing math calculations (such as depreciation) and completing your tax forms;
they may also help catch some of your mistakes. They also have drawbacks—specifi
cally, tax software will not do the following:
• Identify the items you can deduct for your business. The software will merely list the
category (for example, Supplies); it will be up to you to figure out what you can claim
on that line.
• Explain how to deduct items that are used both for business and personal purposes.
You will need to figure out how to claim not only the supplies that you use exclu
sively for your business but also the supplies that you use for both business and per
sonal purposes. Here’s an example: Let’s say that you spent $120 on arts and crafts
supplies that were used only by the children in your care and $600 on household
cleaning supplies that were used by both your business and your family. In this case,
you can deduct the full amount of the arts and crafts supplies but not of the cleaning
supplies. You must multiply that $600 by your Time-Space percentage and add that
amount to the $120 for arts and crafts supplies. The total is the number that you enter
on Schedule C, line 22. If you don’t know that you can’t claim either $720 or the
Time-Space percentage of $720 for your supplies, then you shouldn’t be using a tax
• Alert you to all the special rules that apply to your business. For example, it won’t
remind you that the reimbursements you received from the Food Program for your
own children are not taxable income.
• Ask you detailed questions to make sure that you are reporting the highest Time-
Space percentage and business deductions that you are allowed to claim.