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2012 Tax Changes for Family Child Care Providers

By Tom Copeland

Each year brings new tax law changes that affect family child care providers. Below is a brief description of the ones that will make the biggest difference on your tax return.

These changes and more will be covered in a webinar “2012 Tax Update: How to Reduce Your Taxes” held on Tuesday, February 12, 2013 at 8:30-10:00pm Eastern Time. Tom Copeland, the leading expert on the business of family child care, will present the webinar. To register, go to:

The cost is $25 (tax deductible!).

* The standard meal allowance rate for 2012 is $1.24 breakfast, $2.32 lunch/supper and $.69 snack. The rates for 2013 are $1.27 breakfast, $2.38 lunch/supper and $.71 snack.

* The standard mileage rate for 2012 is $.555 per business mile.

* A new 50% depreciation rule allows you to deduct 50% of the business portion of new items purchased in 20121. Such items include furniture, appliances, computers and fences. Home and home improvements are not eligible for this rule.

* The Social Security/Medicare tax rate remained at 13.3% for 2012, but rises to 15.3% for 2013.

* Here are the retirement plan contribution limits for 2012: Traditional or Roth IRA $5,000 (plus $1,000 if age 50 or older); SIMPLE IRA $11,500 (plus $2,500 if age 50 or older); SEP IRA 18.58% of profit. The limits rise to $5,500 for the Traditional and Roth IRA in 2013. The SIMPLE limit rises to $12.000.

* The Saver’s Tax Credit is a credit for low-income child care providers who make a contribution to an IRA. The eligibility limits for 2012 are: $57,500 married filing jointly; $28,750 single. The credit is 10%, 20% or 50% of up to a $2,000 contribution to any IRA. This credit is in addition to the tax deductibility of regular IRA contributions.

You can keep up-to-date with all family child care business issues on my blog:

What is a Webinar?
A webinar is a live workshop conducted through the Internet. Participants will receive directions on how to link your computer to the webinar as well as a phone number to call to listen to Tom Copeland speaking. You will see a power point slide presentation on your computer and listen to Tom presenting the workshop. You will have the chance to ask questions throughout the webinar. If Tom can't get to your question during the webinar he will contact you after the webinar to follow up. You will also receive a copy of the power point presentation and handouts.

How to Register
To register for this important webinar, go to:
or contact Mandi Hardy at 800-359-3817 (ext 225); email business

The fee for the webinar is $25. The cost is 100% tax deductible!

This webinar is being sponsored by The webinar is being hosted by the National Association for Family Child Care.

Tom Copeland is a licensed attorney who has written nine books on the business of family child care and has presented workshops for hundreds of thousands of family child care providers across the country since 1981. He has represented dozens of child care providers in IRS audits and has won five U.S. Tax Court cases. He is the nation's leading authority on family child care record keeping and taxes. I hope you will take advantage of this opportunity to reduce your taxes and join me on Tuesday, February 12th.

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