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Old 05-11-2012, 10:20 AM
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TomCopeland TomCopeland is offline
Business Author/Trainer
Join Date: Jun 2010
Location: St. Paul, Minnesota
Posts: 3,061
Default Starting a child care center

Originally Posted by dreambeliever View Post
I'm thinking of making a leap of faith and starting a very unique child-care program. Here's the situation, please give me any advice you can!

A new Charter School (pet project of University of Texas) for grades 3-12 is starting in August and my son got in with the first lottery. It's going to be very high-tech and project-based. The students will be issued laptops and will be introduced to the content in online classes (this will take an hour or so a day outside of school) and then when they go into the classroom, they will have intense project-based learning to reinforce and really learn the content. It's turning the typical model around. So we're really excited but unfortunately the school day will only go from 8-12 and after that, the students have to go.
They really want more parental involvement than in a typical school but unfortunately those hours just don't work for a lot of families. So there will be many parents looking for afternoon (or afterschool) care that is more than just babysitting and really fills in any holes that a short school day like this might create (like less time for the arts, P.E., etc). So I decided that who better qualified than I to start that?? lol. I am a certified all level art teacher and I currently am finishing my 6th year teaching high school. I love ALL subjects, I'm project oriented and I can't wait to get this started and not because I hate my job or think this will be easy. I know owning a business will be hard. I am not sure I'm cut out for the paperwork side of it but I'm going to do what I have to do.
My biggest concern is, how will I still make a living? My husband is a band director and cannot support us on his own. I know this will be a risk but I need a clear idea of what kind of expenses I'm going to have to deal with. I have more than one local church offering their facilities to use and I have big dreams for this program. My husband is concerned about how much less I will be bringing in (so am I) and we realize we may end up having to sell our home and downsize. Here are my questions:

1. Is it true that I will have to pay two sets of taxes? One, my income and two, the profit I make from the business.
2. Do I have to be certified or registered with the state as a daycare if I'm watching 3rd-12th graders "afterschool"? Is being a certified teacher enough?
3. Is there some kind of law about ratio when it comes to these ages for an afterschool program? It's such a big range (the first year will actually only have 3rd-6th and every year they will add another grade) so I wasn't sure.
4. Would being a church change anything concerning taxes or inspections? It's not a home and not just a place where children are cared for.

Thank you for any help you can provide! I'm sure I have more questions but I'm too brain-dead to think of all of them. End of the school-year craziness is wearing me out!
1) How much you will pay in taxes depends on the type of business structure you set up to run your program. If you operate as a sole proprietor, you will pay income and social security taxes on all your profit. If you set up as a C corporation you will pay taxes as a corporation and as an individual (double taxation). If you set up as an S corporation you only get taxed as an individual, not as a corporation.
2) This is a question for your state child care licensing agency.
3) Same answer as #2
4) If you rent space from the church, then your taxes will be based on the business structure you choose. If you operate as a program of the church, then you will operate under the non-profit tax basis of the church. Contact your state child care agency about whether the rules are different for church-based programs.
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