DOUBLE TAP TO ZOOM WITH PHONE OR TABLET INTRODUCTION The Business of Child Care F amily child care can be both difficult and rewarding. Few people give as much of them- selves or accept more responsibility than the family child care provider. And few are more deserving of the satisfaction that comes from helping children learn and grow. As a provider, you know those difficulties and rewards well. However, there are other challenges that are equally important, to which you may not have given as much thought—such as dealing with parents, paying bills, making a profit, doing your taxes, and meeting government requirements. Taking care of the children is only half your job. The other half is taking care of your business. It is in your best interest to know as much about taking care of your business as you do about taking care of children. The parents who hire you will appreciate and respect it—and the Internal Revenue Service will demand it. Since trying to follow all the advice in this book at once would pose a significant chal- lenge for anyone, don’t try to read this book from cover to cover. Instead, use it as a guide when you are looking for answers to specific questions about what is deductible and how to keep accurate records. Take your time. If you don’t understand something, ask for help. If you try to improve your business skills a little more each year, your success will be assured. Providing Informal Child Care As a child care provider, you don’t need to have a business name or be registered with your state or Chamber of Commerce in order to be considered a business. All you need to do is open your business and start caring for children. From the standpoint of the IRS, you do not have to be regulated in order to be in business and start claiming expenses. If the local child care requirements are voluntary, or if you are exempt from them, you may claim all the same business deductions as a licensed or certified provider. For instance, your state may require providers to be licensed if they care for more than four children. If you care for three children, you will be exempt from licensing rules, but you will still be able to deduct the same business expenses as a licensed provider. (You may even claim many expenses if you are operating illegally. See page 88 for further details.) COPYRIGHTED MATERIAL 1