2020 Taxes Done? Now Take These Steps

If you have completed your 2020 taxes, congratulations!

Here’s a checklist of final steps you should take as a family child care provider before you can forget about last year’s taxes:

1) Gather all your business records that you used for your 2020 tax return and put them with a copy of your tax return.

2) Record the odometer readings for all your vehicles as of January 1, 2021.

3) Save all your canceled checks (carbon copies) and monthly bank statements for all your personal and business checking and savings accounts.

4) Gather all copies of your Food Program monthly claim forms.

5) Collect your attendance records and any sign-in/out sheets signed by parents.

6) Ask your tax preparer for copies of all the backup worksheets or depreciation schedules used to prepare your taxes.

7) If you use the KidKare software program, print out the following reports: Depreciation Worksheet, Form 8829 Detailed Expenses, Schedule C Detailed Expenses, Standard Meal Allowance, Statement of Payments, Time Space Hours Children Present, Time Space Other Activities, Time Space Calculation, and Vehicle Mileage.

8) Put all the records from above into a sealed plastic storage box (100% tax deductible!) to protect them from water damage. Put the storage box in a safe, dry place.

9) Save these records for at least three years (until April 15, 2024).

Bonus step! You can throw away your tax records for 2017 and earlier if you want. Keep any records for these years of items you were depreciating until the depreciation period expires, plus three years.

Now you can rest easy.

Tom Copeland – www.tomcopelandblog.com

Image credit: https://graphictickets.com/2016/04/tips-for-storing-paper-receipts-for-taxes/

For more information on record keeping, see my Family Child Care Record Keeping Guide.