Home Daycare

[dleythebest]

I am looking into starting a Group child daycare home (12 children) or Family child daycare home (6 children) in my basement. I know all of the requirements regarding licensing. Although taxes, employee taxes, payroll taxes, unemployment etc. are a little cloudy for me.

If I have 1 employee for a family child care daycare child care home and or 2 employee for a group daycare home all part time, I would no offer benefits of any sort...what do I need to pay into the IRS? Do I need to pay unemployment, workmen's comp etc.? What % should I expect to take out of my income to cover all additional expenses? I am worried I am not looking at all areas to remain legal.

I also need insurance advice!

Thanks in advance!

[midaycare]

Originally Posted by dleythebest

I am looking into starting a Group child daycare home (12 children) or Family child daycare home (6 children) in my basement. I know all of the requirements regarding licensing. Although taxes, employee taxes, payroll taxes, unemployment etc. are a little cloudy for me.

If I have 1 employee for a family child care daycare child care home and or 2 employee for a group daycare home all part time, I would no offer benefits of any sort...what do I need to pay into the IRS? Do I need to pay unemployment, workmen's comp etc.? What % should I expect to take out of my income to cover all additional expenses? I am worried I am not looking at all areas to remain legal.

I also need insurance advice!

Thanks in advance!

Please, please see an accountant. I messed up so bad my first year with taxes I had to pay $2500 for an accountant to fix it. And I know taxes really well!

[spedmommy4]

Yes you need to pay taxes and workman's comp for your employees. You will also have to get a tax ID number with the state and federal government.

The previous poster is right though, if you aren't sure what you are doing, hire an accountant. It is so complicated. Personally, I use a payroll service through my bank for my employees and an accountant for my personal taxes. It keeps me legal with the IRS and state tax board.

As for insurance, I use DCI. My state doesn't require me to carry insurance but, in my opinion, it is risky not to. Your childcare insurance options are going to vary based on where you are located.

[Controlled Chaos]

I have an assistant 1 day a week. I hired an accountant for $1000 a year including income tax, pays quarterly taxes, set up my LLC, and files my personal and professional taxes. Sooooo worth it! Hire someone!

[dleythebest]

Do I need an LLC for a home daycare for 12 children? And a tax ID?

I am assuming I wouldn't need to pay in workmen's comp if I am the only employee (for 6 kids).

[Controlled Chaos]

Originally Posted by dleythebest

Do I need an LLC for a home daycare for 12 children? And a tax ID?

I am assuming I wouldn't need to pay in workmen's comp if I am the only employee (for 6 kids).

You don't need an LLC, my accountant and I decided that was best for my particular situation. You can also be a sole proprietor business.

[spedmommy4]

Originally Posted by dleythebest

Do I need an LLC for a home daycare for 12 children? And a tax ID?

I am assuming I wouldn't need to pay in workmen's comp if I am the only employee (for 6 kids).

No, you do not need to pay workmans comp on yourself. It's only if you hire someone.

[DaveA]

+1 on checking with a local accountant. Tax screw ups can get expensive fast. Also if you live in an area with an HOA, check with it beforehand. That can be a mess if you've already opened up and they come knocking.

[284878]

Originally Posted by dleythebest

I am looking into starting a Group child daycare home (12 children) or Family child daycare home (6 children) in my basement. I know all of the requirements regarding licensing. Although taxes, employee taxes, payroll taxes, unemployment etc. are a little cloudy for me.

If I have 1 employee for a family child care daycare child care home and or 2 employee for a group daycare home all part time, I would no offer benefits of any sort...what do I need to pay into the IRS? Do I need to pay unemployment, workmen's comp etc.? What % should I expect to take out of my income to cover all additional expenses? I am worried I am not looking at all areas to remain legal.

I also need insurance advice!

Thanks in advance!

What state are you in?

I use farm bureau for insurance.
LLC is not needed. A dba is only $10 and has some advantages.
Personally, I would start small and increase # number of kids as you grow.

[dleythebest]

I live in MI.

What should I expect to take out of my income for taxes, workmen's comp, unemployment, employee wage? I was thinking 30%.