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Daycare and Taxes>Does Anyone Use Turbo Tax? TOM What Do You Think?
Little People 06:46 AM 12-15-2010
Hi does anyone use turbo tax to file their daycare taxes? Was just wondering.
Maybe Tom would know if this would work?
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jen 07:04 AM 12-15-2010
I do and I love it!

But, before he retired, my dad was to be the Regional Director for the Collections Dept. of the IRS, so he helped me with my taxes the first few years.
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kitkat 07:16 AM 12-15-2010
I use Turbo Tax (or one of the similar programs, can't remember right now). I love it! I don't have any of the record keeping programs, but I have no problems doing my taxes using the online tax stuff. A local tax place was charging me over $300 to do my taxes, and we just couldn't afford it anymore, so I switch to TurboTax.
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Little People 07:25 AM 12-15-2010
Kitkat & Jen... Do you use the business turbo tax? And how does it work for the sq. ft. of your home and any other info would be great!

Thanks Lesia
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kitkat 12:02 PM 12-15-2010
I tried to see what version I use, but I can't. I can tell you that it's Tax Act online. I'm guessing it was probably the small business version. We got a new computer and I'm having a hard time finding saved documents on it that DH transferred from the old one. If I find more info, I'll let you know. If you haven't done so already, I highly suggest buying Tom's book on taxes for child care providers. You can buy it now, but it won't ship til Jan I think. I'm sorry, my brain is just going blank today! I'll have to get back to you with more info.
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DCMom 04:55 AM 12-16-2010
I use Turbo Tax Home and Business; it's asks specific questions for daycare.
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kitkat 09:08 AM 12-16-2010
Here's a link to Red Leaf Press...that's where I bought Tom's book. I wouldn't have been able to do my taxes so well if it weren't for that book. It's easy to follow and understand. If you don't have it, get it. It explains so many different scenarios. Don't forget, it's a business expense!

http://www.redleafpress.org/showprod...fm?FullCat=493

As far as Tax Act goes, it's very simple. It'll ask you questions and you fill in the blanks. You do have to do some work, like know how many sq. feet you have, how many hours, etc, but it's very easy to use. I'm sure I don't get as many deductions/expenses by doing it myself, but I'm ok with that. I'm not good at keeping track of expenses like paper towels, toilet paper, etc. and going to a tax professional really wouldn't make me at keeping better track If you go to the irs website (irs.gov) and click on free file, it'll have a short quiz type thing that will tell you which online tax program you are eligible to use. You'll want to look for a program that is for self employed. I just checked the website and it doesn't look like it's updated for 2009 stuff yet. You can also buy software programs like Turbo Tax at places like Staples.
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TomCopeland 10:08 AM 12-30-2010
Using tax software (Turbo Tax, etc.) is fine but only if you already know what you are doing.

Software won't tell you what is deductible.
It won't explain how to deduct items that are used both business and personal. So, you must know how to calculate your time-space percentage and apply this to items before you enter them into the software.
It won't tell you that reimbursements from the Food Program for your own children are not taxable income.
Using software to calculate your depreciation can be difficult to understand.

So, if you know all this stuff then using software can be an easy way to prepare your taxes. But it you aren't sure about what you are doing, don't use it. I've seen many providers who got into trouble with the IRS because they didn't know how to use software (claimed house expenses twice, etc.).
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Daycare_Mama 10:25 AM 12-30-2010
Originally Posted by TomCopeland:
Using tax software (Turbo Tax, etc.) is fine but only if you already know what you are doing.

Software won't tell you what is deductible.
It won't explain how to deduct items that are used both business and personal. So, you must know how to calculate your time-space percentage and apply this to items before you enter them into the software.
It won't tell you that reimbursements from the Food Program for your own children are not taxable income.
Using software to calculate your depreciation can be difficult to understand.

So, if you know all this stuff then using software can be an easy way to prepare your taxes. But it you aren't sure about what you are doing, don't use it. I've seen many providers who got into trouble with the IRS because they didn't know how to use software (claimed house expenses twice, etc.).
This makes me nervous now because I was going to try to use turbo tax this year. I'm unlicensed (legally) and only care for one family and I can't afford to pay hundreds for someone to do my taxes. My mom's accountant who was my dad's accountant for years for his business has done mine every year for $60, but last year I got the feeling he didn't know much about daycare taxes. I would love to go to someone who knows what they're doing in the daycare area, but I can't afford more than $100 for it. Tom, is there anyone in the Minneapolis area you can reccommend that is affordable and knows what they're doing? I've been told my taxes are easy - I don't own any real estate or anything and it usually takes him just 10-15 minutes to do mine. If I buy your book, would I then be able to use turbo tax easily?
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TomCopeland 05:08 PM 12-30-2010
Since I've done training of tax preparers in the Twin Cities for many years there are a number of tax preparers who know what they are doing with family child care providers. There's a tax preparer directory at http://www.nafcc.org/business/record_keeping.asp that will list many in your area. I can't say if they are affordable or not.

If you use my Family Child Care Tax Workbook and Organizer you will be able to use Turbo Tax successfully. If you have questions as you are filling out your tax return, contact me at tomcopeland@live.com
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Daycare_Mama 07:47 PM 12-30-2010
Thanks so much for the advice and that link!
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