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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 08-01-2012, 08:38 AM
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frugalmama4 frugalmama4 is offline
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Join Date: Jan 2012
Location: Texas
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Default Questions for Tom Copeland

Hi Tom, hope you’re having a great week!

I have a few questions regarding hiring a helper. I live in the Houston, TX area and run a daycare out of my home. I have read through threads and all over your blog, but I’m still a little (lot) lost.

1. The employee needs to fill out a W-4 form right?
b. What forms do I fill out and file with the IRS as the employer?
2. Which taxes do I need to cover and withhold?
3. How do I calculate the amount of taxes to take out?
4. When and how do I pay the taxes to the IRS?....Can I due this when I file my taxes?
5. Will I be able to write off all taxes paid on the employee’s behalf as a business expense?
6. What documentation should I keep on file regarding the employee?


Thanks so much for all you do for us providers…Have a great day Tom
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Old 08-06-2012, 09:34 AM
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TomCopeland TomCopeland is offline
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Location: St. Paul, Minnesota
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Quote:
Originally Posted by frugalmama4 View Post
Hi Tom, hope you’re having a great week!

I have a few questions regarding hiring a helper. I live in the Houston, TX area and run a daycare out of my home. I have read through threads and all over your blog, but I’m still a little (lot) lost.

1. The employee needs to fill out a W-4 form right?
b. What forms do I fill out and file with the IRS as the employer?
2. Which taxes do I need to cover and withhold?
3. How do I calculate the amount of taxes to take out?
4. When and how do I pay the taxes to the IRS?....Can I due this when I file my taxes?
5. Will I be able to write off all taxes paid on the employee’s behalf as a business expense?
6. What documentation should I keep on file regarding the employee?


Thanks so much for all you do for us providers…Have a great day Tom
1) Yes
1b) Form 941, W-2, W-3, Form 940
2) You must withhold 5.65% of your employee's pay for Social Security/Medicare taxes. You must pay an additional 7.65% of wages out of your own pocket. You will owe .6% federal unemployment tax. You will also have to withhold federal and state income taxes, and pay state unemployment taxes out of your own pocket.
3) See #2
4) File Social Security/Medicare taxes quarterly using Form 941. File Form 940 by the end of January.
5) Yes
6) Amount of hours worked, job description, amount and proof of amount paid in wages

See my Family Child Care Tax Workbook for details and examples of how to fill out these forms.
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Old 09-21-2012, 05:26 PM
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Abigail Abigail is offline
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Location: North Dakota
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Is your tax workbook for 2012 only available after January? I'm wondering what other books I should buy to be prepared for taxes 2012. I have your record-keeping book already.

Also, since I have one employee who started 2 months ago, do I count all my "employer" expenses as a cost of doing daycare like how other things will be expenses like toys, supplies, standard meal deductions/mileage, etc?
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Old 09-22-2012, 05:15 PM
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TomCopeland TomCopeland is offline
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Join Date: Jun 2010
Location: St. Paul, Minnesota
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My 2012 Family Child Care Tax Workbook and Organizer will come out the first week of January 2013.

Yes, you can deduct all the expenses associated with hiring an employee (payroll taxes, workers comp, etc) as a 100% business deduction.
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