Starting an in-home childcare business of your own is new and exciting in almost every way — until you start thinking about taxes. It can feel overwhelming, and sometimes even scary, when you realize you’ll be in charge of managing your withholdings on your own. That’s why Wonderschool offers professional childcare business tax support to all of its providers. Read on to learn more about what our tax services look like, and how they can help you save money without the stress of doing things on your own. We’ll start with some of the most commonly-asked questions of childcare providers today.
Most in-home childcare providers pay between 20 and 30% in taxes. This includes state and federal taxes when applicable (since not all states require an income tax to be paid). It also consists of the self-employment tax, which everyone will have to pay. Self-employment tax is 12.4% for social security and 2.9% for medicare.
The most important thing to remember here is that not every dollar that comes through your door will be counted as income. You can list almost everything you use for your childcare business as a tax deduction. These items lower your overall profit and the tax bill that comes with it.
Since deductions can make such a significant impact on your tax bill, it’s important that you don’t miss a single one. Here are some of the most common deductions from childcare business tax:
Each and every one of these deductions should be well-documented and saved for tax time. You will subtract them directly from the income you receive to find out how much money you’ll be taxed on at the state and federal levels.
The home office deduction is another big one for in-home childcare tax, but it’s not as simple as those listed above. You can use a simplified amount, but as a home daycare provider, you’ll likely save more money by calculating these numbers based on income, the size of your home, the value of your home, and more.
You can learn more about this specific deduction here.
If childcare business tax still feels overwhelming, it’s always okay, and often recommended, to seek professional support. When you pay a tax service to take care of the calculations for you, you can have the peace of mind that it’s 100% accurate. You can also trust that the tax professionals saved you as much money as possible by finding every deduction.
At Wonderschool, we offer all of our providers access to professional tax support at a heavily discounted rate. Why? We want to see you succeed in saving as much profit from your business as possible without the stress that comes from filing taxes on your own.
Most childcare tax services cost more than $500, while ours only cost $390 per year (which is another tax-deductible expense, by the way). And as a bonus, our tax services also include access to other financial planning support, such as retirement planning, college planning, financial advising, advice on budgets and debt solutions, and more.
You can take advantage of these benefits by contacting our EA, Cliff Barros, at [email protected] or 209.951.5148.
No matter the path you take toward figuring out your taxes, remember we’re here for you every step of the way. It doesn’t need to feel overwhelming, and you deserve to cash in on every deduction possible. Just let us know if you’re ready for hands-on help.
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