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Archive for the ‘Taxes’ Category

Tips For Organizing Your Record Keeping

To be sure that you are prepared for tax time or in the event of an audit, it is vital that you effectively manage and maintain your tax records. Every year at the end of the year, I take a look at how I have been keeping track of my business income and expenses for tax purposes.

In fact, I perform a personal audit by reviewing my bank statements, check books and reviewing the receipts that I have filed away in my records.

According to the Internal Revenue Service, after you file your tax return you will have many records that may help document items on tax return. Moreover, you will need these documents in the event your return is selected for examination. Here are Four easy ways to manage your record keeping:

1. Use manila folders or 3-ring binders to keep track of business expense and tax records for the current year. Be sure to create a folder for: income, business expenses, payroll, quarterly tax returns, Business loans,etc.

2. Store a way all old tax and personnel records and keep them for up to 10 years.

3. Store all personnel and records with sensitive information such as; social security numbers in a locked file cabinet.

4. Get a back-up system and invest in a computerized bookkeeping software to keep track of your income and Business expenses.

For more record keeping tips, click here.

Shiketa

For more business management tips, subscribe to the 7-Day Child Care Business Management eCourse, click here.

Issuing Tax Statements To Parents

At the end of every year, I begin to prepare childcare totals for each family. Then in January, I send home a statement for each family that indicates the amount of childcare expenses paid to me for the previous calendar year. In fact, I believe it is vital that you issue  childcare tax statements in a timely manner (preferably by January 31st), so that parents can file their child care expenses on their tax return. A tax statement does not have to be a fancy document. However, it must contain the following information for tax purposes:

  • The name of your Business
  • Your Business phone number, Address, City State and Zip Code
  • Your Tax Id Number or Social Security Number
  • The Name of the child that you provided care for
  • The Amount Paid to you for childcare services
  • Be sure to sign the document

If you do not have a Tax ID number, you may want to consider applying for one to issue to parents for tax purposes.  As you are in the process of preparing statement, be sure to issue a parent letter  or post a notice that indicates when tax statements will be issued. If you do not have a Parent Tax Statement form to issue to parents, I have created one for you—>  Click here (Be sure to change the tax year on the form)

I wish you Continued Success!

Shiketa

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