Family Child Care 2021 Tax Workbook and Organizer

by Tom Copeland, Bill Porter (Revised by)

Overview

Tom Copeland is the nation’s leading expert on the business of family child care and Bill Porter is the founder of Pride Tax Preparation. As tax season approaches each year, thousands of family child care providers save time and money using the Tax Workbook and Organizer. The most comprehensive resource available, this book contains up-to-date guidance so family child care providers can accurately complete their own tax returns and take advantage of all the business deductions they are entitled to claim.

With closures and other challenges associated with COVID-19, preparing your taxes for 2021 may be more complicated than ever. Tom and Bill attend IRS seminars so you don’t have to!

The Family Child Care 2021 Tax Workbook and Organizer contains information on

How to report stimulus checks

How to report unemployment benefits

How to treat SBA loan programs: Paycheck Protection Program and Economic Injury Disaster Loans

What's deductible because of COVID-19

Product Details

ISBN-13:	9781605547572
Publisher:	Redleaf Press
Publication date:	03/15/2022
Series:	Redleaf Business Series
Pages:	280
Product dimensions:	10.80(w) x 8.50(h) x 0.80(d)

About the Author

Tom Copeland, JD, is a renowned tax and child care business specialist. A licensed attorney, he trains thousands of family child care providers, trainers, and tax preparers each year on important business issues, including record keeping, taxes, marketing, contracts, and legal issues. Tom is also the author of many books and resources for family child care providers. Currently, he is a consultant for the National Association for Family Child Care (NAFCC). He has been awarded the Friends of NAFCC Award from the National Association for Family Child Care and the Child Care Advocate of the Year award from the Minnesota Licensed Family Child Care Association.

Bill Porter became a tax professional in 2008 when he started his company Pride Tax Preparation in the suburbs of Minneapolis, Minnesota. After passing the "Special Enrollment Examination" with the IRS to become an Enrolled Agent, he soon realized that most tax returns of child care providers were either incorrect or missing important deductions, so he decided to specialize his business towards helping child care providers. When preparing tax returns, he focuses on ensuring everything is correct and using all allowable deductions so his clients can have the best outcome.

Table of Contents

Acknowledgments ix

Highlights of the New Tax Laws x

Tax Changes and Other Things to Consider for 2021 xi

Introduction xv

Getting Help xv

Notes on This Edition xvi

IRS Child Care Provider Audit Technique Guide xvi

How to Find a Tax Professional xvi

Using Tax Preparation Software xvii

How to Use This Book 1

The Tax Organizer 1

The Tax Workbook 2

Tax Forms 2

Complete Your Tax Forms in the Correct Order 2

About the Math in This Book 4

Give This Book to Your Tax Preparer 4

If You File Electronically 6

A Few Other Issues before We Get Started 6

Record-Keeping and Tax Tips 9

New Tom Copeland Record-Keeping DVD 9

Should You Take a Distribution from Your IRA? 9

Should You Claim Social Security Benefits Early? 10

How Much Money Do You Want to Make? 11

Who Needs an Emergency Fund? 11

Time to Invest in Your 2022 IRA! 13

Retirement Plan Limits for 2021 13

Part I The Tax Organizer

The Tax Organizer 17

Your Income 18

Your Time Percentage 19

Your Space Percentage 22

Your Time-Space Percentage 23

Your Business Expenses 24

Your Vehicle Expenses 26

Your Food Expenses 29

Your Home Expenses 34

Your Depreciation 35

Your Home Depreciation (including home and land improvements) 35

Part II The Tax Workbook

1 Calculating Your Time-Space Percentage 39

Step One: Calculate Your Time Percentage 40

Step Two: Calculate Your Space Percentage 41

Step Three: Calculate Your Time-Space Percentage 43

Exclusive-Use Rooms 43

2 Claiming Your Home Expenses: Form 8829 45

How to Fill Out Form 8829 46

What You Can't Claim on Form 8829 54

Special Cases for Form 8829 55

3 Calculating Your Depreciation: Form 4562 60

Major Change in Depreciation Rules 60

Taking a Household Inventory 67

Determining Your Depreciation 68

Calculating Depreciation by Category 74

Personal Computer/Office Equipment 74

Other Personal Property 78

Home Improvements 80

Land Improvements 83

Home Depreciation 84

Vehicle Depreciation 87

Start-Up Costs: A Special Rule 89

Special Cases for Depreciation 90

2021 Depreciation Tables 92

4 Reporting Your Food Program Income and Food Expenses 93

Reporting Your Income from the Food Program 93

Determining the Cost of Your Food 97

Reporting Your Food Expenses 98

Summary of Food Income and Expenses 99

5 Reporting Your Business Income and Expenses: Schedule C 101

Reporting Income (Part I of Schedule C) 101

Claiming Expenses (Part II of Schedule C) 104

How to Fill Out Schedule C 106

Vehicle Expenses (Line 9) 112

Should You and Your Spouse File Two Schedule Cs? 117

6 Completing Your Tax Return 119

Filing an Extension 119

Self-Employment Tax: Schedule SE 120

Education Credits: Form 8863 121

The Earned Income Credit: Schedule EIC 122

Other Tax Credits 124

Completing Your Tax Return: Form 1040 125

Filing Quarterly Taxes: Form 1040-ES 130

Filing Your Tax Return Electronically or via the Internet 133

Save Your Records 133

7 Catching Your Errors: The Tax Return Checklist 135

Part III Tax Instructions for Special Situations

8 Hiring Employees and Paying Payroll Taxes 145

Employee or Independent Contractor? 145

Hiring Employees 148

Labor Law Posters 151

Applying for an EFN 151

The Rules of Tax Withholding 155

How to Fill Out Payroll Tax Forms 159

9 Amending Your Tax Return: Form 1040X 177

Example of an Amended Return 178

10 Recovering Your Unclaimed Depreciation: Form 3115 183

Requirements for Using Form 3115 184

How to Fill Out Form 3115 189

How to File Form 3115 191

11 Selling Your Business Property: Form 4797 198

An Item Wears Out during the Depreciation Period 199

You Sell an Item You've Used for Business 200

You Sell a Vehicle You've Used for Business 203

You Have to Recapture Some Depreciation 204

12 Selling Your Home: Form 4797 and Schedule D 210

Other Points to Consider 212

13 Closing Your Child Care Business 214

Depreciation Issues 214

Going Out of Business Checklist 215

14 Dealing with an Audit 217

You Have the Right to Appeal 219

Get the Help You Need 219

Part IV Appendixes

A Sample Tax Return 223

B How and When to Depreciate an Item 242

C IRS Resources 244

List of IRS Forms and Publications 246

D Finding and Working with a Tax Professional 248

Tax Professional Directory 248

Working with a Tax Professional 248

Part V Tax Forms

Form W-10 Dependent Care Provider's Identification and Certification 250

Safe Harbor Election Statements 250

Form 1040 U.S. Individual Income Tax Return 251

Schedule C Profit or Loss from Business 253

Schedule SE Self-Employment Tax 255

Form 4562 Depreciation and Amortization 256

Form 8829 Expenses for Business Use of Your Home 258

Form 8995 Qualified Business Income Deduction Simplified Computation 259

Using Redleaf Record-Keeping Tools 260