My daycare software provides a year end statement printable, either with the data you have entered through the invoicing system, or you can enter the total. Before I used that I used the W-10. Tom Copeland of Redleaf Press recommends an annual receipt with the relevant info that your client signs to keep a copy of for your own records. This covers your business if a client claims a higher amount of daycare expense for a larger daycare credit than you claimed as income, thus heading a potential audit off right at the beginning.

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