April 18th is the deadline for family child care providers to file your federal estimated tax payment for the first quarter of 2017.
This comes as a shock to some child care providers because it’s the same deadline for paying your 2016 taxes.
Most child care providers do not need to file estimated taxes (IRS Form 1040 ES Estimated Tax for Individuals). This is because their spouse usually has enough withheld in taxes to cover them.
Child care providers who most likely need to file estimated taxes are those who are single or who have a spouse who is unemployed or self-employed.
If you are not sure if you or your spouse has paid in enough taxes for the months of January, February and March, you should make a tax payment with this form. You goal is to have paid in at least 90% of the taxes you owe for this quarter to avoid paying a penalty. If you pay in too much you will get a refund.
How do you know how much you will owe in taxes? If you were in business in 2016, use last year as a guide. If this is your first year, use 20% of your gross income (parents fees plus Food Program income) as a conservative guess of how much you will owe.
Lastly, check your records to see if you will owe any state income taxes. If so, make a state estimated tax payment by April 18th as well. The second quarter for estimated taxes covers the months of April and May. The deadline to file for the second quarter is June 15, 2017. Yes, these quarters are not equal!
Tom Copeland – www.tomcopelandblog.com
Image credit: https://www.flickr.com/photos/jakerust/
For details on how to file your estimated taxes, see my book Family Child Care Tax Workbook and Organizer.