by Tom Copeland
Here are the key tax changes for 2012 that affect family child care providers:
• The standard meal allowance rate for 2012 is: $1.24 breakfast; $2.32 lunch/supper and $.69 snack. The rate for 2012 is $1.27 breakfast, $2.38 lunch/supper and $.71 snack.
• The standard mileage rate is $.555 per business mile.
• A new 50% bonus depreciation rule allows providers to deduct the entire business portion of the following items in 2012, rather than depreciating them: furniture, appliances, computers, equipment, and fences.
• The Social Security tax rate on business profit continues to be 2% lower than 2010 to 13.3%.
• Retirement plan contribution limits for 2012: Regular 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.
• Saver’s Tax Credit eligibility limits: $57,500 married filing jointly; $28,750 single.
• If you have improperly treated assistants as independent contractors, the IRS will offer relief from an IRS audit if you apply for the Voluntary Classification Settlement Program: http://tinyurl.com/3c7djt4
For details, see the 2012 Family Child Care Tax Workbook and Organizer (www.redleafpress.org; 800-423-8309).