Tax Season can be a stressful time of year for any business and child care centers are no different! With varying rules and regulations between states and countries, navigating the tax season landscape can seem daunting to new and experienced child care center owners, but there are steps you can take to make the whole experience easier on yourself. With a little bit of effort, preparation and strong record-keeping through your billing system, you can ensure that this tax season goes smoother than ever.
Understanding Your Center’s Business Structure
Before you start prepping your paperwork, it’s important to be sure that you know what kind of business structure you’ll be filing as. Some of the most common types are limited liability companies (LLC), sole proprietorships, partnerships and corporations. If you’re the owner or manager of an existing child care business you likely already know your center’s business structure by heart, but if you’re looking to start your own, it’s worth evaluating the pros and cons of each type. Every center is different so if you’re still in the planning stages of your business, consult a tax specialist to help you make the right decision.
Knowing Your Eligibility For Tax Deductions
Who doesn’t like saving some money during tax season? Well depending on some of the financial decisions you made throughout your fiscal year, you may be eligible for some tax deductions that will reduce your center’s tax liability. Check out some of the most common tax deductions that child care centers are able to claim:
Supplies and Educational Materials
Employee Wages and Benefits
Marketing and Advertising
Claiming Child Care Tax Credits
Child and Dependent Care Credit
Work Opportunity Tax Credit (WOTC)
Preparing to File: Best Practices
- LLCs and Corporations – April 15th, 2024
- Sole Proprietorships – April 18th, 2024
- Partnerships – March 15th, 2024