6 Family Child Care Record-Keeping Guide The• Redleaf Calendar-Keeper is a wall calendar that allows you to keep all your records in one place. It includes space to record the attendance and payments for each child, as well as your miscellaneous income, deductible business expenses, capital expenditures, and business mileage. Minute Menu Kids Pro is a comprehensive record-keeping software program that allows • you to track all the records you need for your business: attendance, Food Program, Time- Space percentage, business expenses, mileage, parent receipts, daily reports, and much more. It can generate reports to help you manage your business income and expenses and create the records you need at tax time. For more information, visit www.minutemenu.com. The record-keeping methods shown in this book can also be used in an ordinary spiral • notebook—simply draw lines to make columns, and then label the columns as shown in the examples. Other useful record-keeping tools include a calculator, computer, printer, file box or cabinet, manila envelopes to store receipts, file folders, and receipt books. Bear in mind that all the items that you use for record keeping—including pencils and printer ink—are deductible business expenses. Using a Business Checking Account Although the IRS doesn’t require you to keep a separate business checkbook, doing so can make it easier to track your business income and expenses. Without it, an IRS auditor may take the position that all the expenses paid out of your personal checking account are per- sonal unless you can prove otherwise. Also, if you have only one checkbook, the IRS is more likely to inquire about both business and personal matters than if your business records are separate. As a family child care provider, you will probably need to write many checks that are only partially deductible for your business (such as utility bills, mortgage payments, and food purchases). Because of this, a separate business account isn’t the full solution to keep- ing your records separate, but it can be a helpful step. If you do set up a business checkbook, you should deposit all your child care income into this account, and pay as many of your business expenses as possible from it. You may also wish to get a business credit card that is separate from your personal credit cards. There will also probably be items that you will have to pay for with cash. I suggest that you keep receipts for these cash business expenses, total the amount that you spend each month, and then write a check for that amount from your business account to your family account. Try not to pay for any personal expenses out of your business checking account. When you need money from your business account for personal use, make out a check to your per- sonal checking account, and record it as a “transfer of income.” Checks that you make out to yourself are not business expenses, and cannot be deducted. (This is how you pay yourself from your business.) FCCRKG8-FourthPages.indd 6 3/10/10 9:21:00 AM