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Daycare and Taxes All things related to Taxes and running a Daycare post here. Topics of tax exemptions, forms, filings, tax write offs, IRS etc.

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Old 01-05-2019, 01:11 PM
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loischerry loischerry is offline
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Default Taxes Unregistered Provider

hello all! i realize im new and realize this is my 1st post. i found this site by googling tom copeland. whose name i was given to look up my tax question. ive read some but most is about in home providers as a business.

background info. i am in mi, i am unlicensed. i am a seasoned daycare worker i will be 47 at the end of the month and have been working in daycare settings since i was 21. 5 years ago the center i was working in folded and closed. i am trained, with ceu's, sids, and cpr and hold a cda. 6 months after "retiring" ( 4 yrs ago) i started caring for my nephews and niece and my cousins baby. its a paycut i wouldnt trade for anything in this world. i love it. this past sept (2018) i started helping a neighbor out and watching her school aged son for 45 mins in the morning before the bus came. she pays me $10 for that 45 mins ($50 a week). she asked me this week about child care credit on her taxes and if she could have my info. i said id never provided it before and id look up info regarding it. and get back to her next week. i use one of those big guy corporations for my taxes and the past 4 yrs have claimed my income from my family as other earned income ( idk what form that is in irs talk) my family has never asked for tax info and ive never given it. ive not actually considered myself a business nor have kept any records business-wise at all. i take this as a neighbor helping a neighbor but i dont want to be taken either. im really at a loss here as i dont provide anything for this boy other than a warm place to watch spongebob and tell him when its time to walk across the yard to his driveway for the bus, i guess my questions are
1. how do i go about this? add up what shes paid? ask her for the amount shes paid?
2. what info do i give my neighbor? is there a form? do i need to legalize this info ( certified mail or notarized? )
3. how would i then claim this info on my taxes? again im unlicensed so i have no provider # how would the irs know that the info she puts on her taxes about child care is correct and how would they know what i put on mine about the claim would be correct?

TIA for any answers.
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  #2  
Old 01-05-2019, 03:50 PM
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Blackcat31 Blackcat31 is offline
 
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Get a tax ID number
It’s free
You can do it here
https://www.irs.gov/businesses/small...yer-id-numbers


Search Tom Copeland’s site here for info on unregistered providers and taxes

Here is one article
http://tomcopelandblog.com/can-paren...m-not-licensed

Here are other threads about non-licensed providers and taxes
https://www.daycare.com/forum/tags.p...s+-+unlicensed

Last edited by Michael; 01-18-2019 at 01:02 PM.
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  #3  
Old 01-10-2019, 10:06 AM
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loischerry loischerry is offline
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black cat 31 thank you for the links. the tax id link was especially helpful as i didnt know that it could be done. the other two im having issues with. the one replies back no matches and the other has a server error 404. im not sure if this an issue with my system or i just have to wait it out.
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Old 01-10-2019, 11:29 AM
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Firefly Firefly is offline
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I tried the links and the first two work for me but the third one says no matches for me as well.
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Old 01-10-2019, 01:14 PM
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284878 284878 is online now
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Quote:
Originally Posted by loischerry View Post
black cat 31 thank you for the links. the tax id link was especially helpful as i didnt know that it could be done. the other two im having issues with. the one replies back no matches and the other has a server error 404. im not sure if this an issue with my system or i just have to wait it out.
Hello there fellow Michigander.



Here is what the second link that bc posted. It is from Tom's blog.

Can Parents Claim the Child Care Tax Credit if I’m Not Licensed?
NOVEMBER 13, 2016


Yes, under two circumstances.

First, if you are caring for six children or fewer (not counting your own children) parents can claim the credit. In this situation it doesn’t matter if you are in violation of your state’s child care licensing rules.

Second, if you are caring for more than six children, parents can claim the credit as long as you are not in violation of your state’s child care licensing rules.

See the Instructions to IRS Form 2441 Child and Dependent Care Expenses.


----- So basically she can claim you only if you watch less than six children because you are in volation of state licensing rules.
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Old 01-10-2019, 02:44 PM
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TomCopeland TomCopeland is online now
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Location: St. Paul, Minnesota
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Default unlicensed

Quote:
Originally Posted by loischerry View Post
hello all! i realize im new and realize this is my 1st post. i found this site by googling tom copeland. whose name i was given to look up my tax question. ive read some but most is about in home providers as a business.

background info. i am in mi, i am unlicensed. i am a seasoned daycare worker i will be 47 at the end of the month and have been working in daycare settings since i was 21. 5 years ago the center i was working in folded and closed. i am trained, with ceu's, sids, and cpr and hold a cda. 6 months after "retiring" ( 4 yrs ago) i started caring for my nephews and niece and my cousins baby. its a paycut i wouldnt trade for anything in this world. i love it. this past sept (2018) i started helping a neighbor out and watching her school aged son for 45 mins in the morning before the bus came. she pays me $10 for that 45 mins ($50 a week). she asked me this week about child care credit on her taxes and if she could have my info. i said id never provided it before and id look up info regarding it. and get back to her next week. i use one of those big guy corporations for my taxes and the past 4 yrs have claimed my income from my family as other earned income ( idk what form that is in irs talk) my family has never asked for tax info and ive never given it. ive not actually considered myself a business nor have kept any records business-wise at all. i take this as a neighbor helping a neighbor but i dont want to be taken either. im really at a loss here as i dont provide anything for this boy other than a warm place to watch spongebob and tell him when its time to walk across the yard to his driveway for the bus, i guess my questions are
1. how do i go about this? add up what shes paid? ask her for the amount shes paid?
2. what info do i give my neighbor? is there a form? do i need to legalize this info ( certified mail or notarized? )
3. how would i then claim this info on my taxes? again im unlicensed so i have no provider # how would the irs know that the info she puts on her taxes about child care is correct and how would they know what i put on mine about the claim would be correct?

TIA for any answers.
You need to contact the Michigan child care licensing office to find out whether you are operating legally or not under your state rules. You don't have to give your real name when you call.
Whether you are legal or not, you are running a business and must report your income on Schedule C and pay Social Security/Medicare taxes and federal and state income taxes.
If you are illegal you can claim all expenses except for those associated with your home: rent, utilities, property tax, mortgage interest, house insurance, house repairs and house depreciation.
The parent can still claim their child care tax credit even if you are illegal. Give her a receipt and your Social Security number. You can get an EIN number to avoid giving out your Social Security number.
Don't worry about what the parent is putting on her tax return, you will never know. Instead report your income on your Schedule C and claim those expenses you are entitled to.
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  #7  
Old 01-18-2019, 04:22 AM
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loischerry loischerry is offline
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@ 284878. hello fellow mitten member! thank you for your info. i understand licensing . i currently am under license exempt as a "family provider". because i currently & foreseeably only watch my niece, my nephews ( pre school age + 1 kindergartner) and my cousins infant. i had to fill out a form and have on file a background check. the state (i assume) read my form and checked me out and sent the form typed out and a letter that said i was accepted and that i must keep the form on file. which i have. im sorry if i confused you with the unlicensed part. the state says i cant say im licensed, and so mostly when asked in conversation i just say unlicensed. i dont advertise i have a daycare and dont openly offer my services. my neighbors no doubt know that the children i have here are not mine, which lead my neighbor to ask me about her son and the bus.

@tom thank you for this information. i am unsure if i file a schedule C but i know i do file something that pays the money that i would regularly would pay when receiving a w2. i have never claimed expenses before but now that i know i will get a list and copies of bills together. i will certainly get a receipt out to her. thank you.
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Old 01-18-2019, 02:54 PM
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TomCopeland TomCopeland is online now
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Join Date: Jun 2010
Location: St. Paul, Minnesota
Posts: 3,028
Default unlicensed

Quote:
Originally Posted by loischerry View Post
@ 284878. hello fellow mitten member! thank you for your info. i understand licensing . i currently am under license exempt as a "family provider". because i currently & foreseeably only watch my niece, my nephews ( pre school age + 1 kindergartner) and my cousins infant. i had to fill out a form and have on file a background check. the state (i assume) read my form and checked me out and sent the form typed out and a letter that said i was accepted and that i must keep the form on file. which i have. im sorry if i confused you with the unlicensed part. the state says i cant say im licensed, and so mostly when asked in conversation i just say unlicensed. i dont advertise i have a daycare and dont openly offer my services. my neighbors no doubt know that the children i have here are not mine, which lead my neighbor to ask me about her son and the bus.

@tom thank you for this information. i am unsure if i file a schedule C but i know i do file something that pays the money that i would regularly would pay when receiving a w2. i have never claimed expenses before but now that i know i will get a list and copies of bills together. i will certainly get a receipt out to her. thank you.
Yes, you must file IRS Form 1040Schedule C Profit or Loss From Business. You can also claim house expenses on IRS Form 8829 Expenses for Business Use of Your Home.
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