Questions to Ask Your Tax Professional

As a family child care provider you want to be spending your time with the children in your care - not worrying about how to fill out your tax return. So you hire a tax professional to file your taxes. But if the IRS finds a mistake on your tax return who is responsible - you or your tax professional?

You are.

That's why it's so important to find someone who understands your business. Do not assume that any tax preparer can properly file your taxes. There are a number of unique tax rules that affect only family child care providers. They include:

Business use of your home - Only family child care providers can claim expenses associated with their home by using rooms on a regular basis for your business. All other businesses must use room exclusively for business purposes. Only family child care providers can have rooms used exclusively for their business as well as regularly used. Your business is the only one that counts the hours you use your home for business purposes to help determine the your time-space percentage.

Food - No other business claims income from the Child and Adult Care Food Program. No other business has the standard meal allowance rule that allows you to deduct food expenses without having any receipts.

Household expenses - Only family child care providers can deduct hundreds of household items (toilet paper, rugs, bedding, lawn mower, appliances, light bulbs, cable tv, and so on) as business expenses.

Here are some questions to ask your tax professional to make sure you have the right person:

1) Can you explain the unique rules listed above? If not - look elsewhere. 

2) What kind of ongoing tax training do you take to keep up on changes in tax laws?

3) How many other family child care clients do you have? The more the better, although a tax professional just starting out may be good for you if her or she has the motivation to learn about your business.

4) What do you charge? Ask about all fees up front.

5) Are you available all year or only during tax season?6) Can you give me some references from other family child care clients?

Lastly - you want to feel comfortable with this person. Is he or she easy to contact and to talk to? You will probably maintain a better relationship with your tax professional if you share similar philosophies about your taxes. If you are assertive about wanting to claim every deduction you are entitled to and your tax professional is more conservative you may want to find someone who will follow your wishes. And visa versa.

Never assume that your tax professional knows all the answers. Ask questions if you don't understand something. Always review your tax return before signing it.

Tom Copeland - www.tomcopelandblog.com 

Image credit: https://keystoneservices.org/seniors/tax-preparation-assistance/

For more information, see my book Family Child Care Record Keeping Guide.