End of the Year Tax Savings Tips

There are several ways a family child care provider can reduce her taxes before the end of the year. The goal is to accelerate your deductions into this year and delay income until next year. Here are some ideas:

1) Stock up on business supplies and materials before the end of the year. These can include: arts and crafts supplies, cleaning supplies, kitchen supplies, curriculum materials, and so on.If you pay by credit card for an item purchased this year, it's considered an expense in the year you made the purchase, even if you don't pay the bill until next year.

2) Ask parents to pay you next year for child care you will deliver the in the last few months of this year. This will shift some of your income to next year so you can reduce your income this year. If a parent gives you a check on December 31st  but you don't deposit it until next year, it's still considered income to you the date you received the check.

3) The sooner you make a contribution to an IRA, the more money you will have at retirement. You can set up a Traditional IRA or SEP IRA before April 15, 2015. Any contributions you make to these IRAs before then will reduce your personal taxable income. If you set up or contribute to a Roth IRA you won't reduce your taxes this year, but you will save money later when you withdraw the contribution and interest at retirement tax free.

4) If you make contributions to a charitable organization before the end of the year, you may be able to reduce your personal taxable income if you can itemize your taxes.

Follow these simple steps to save a little more money this year!

Tom Copeland - www.tomcopelandblog.com

Image credit: https://www.flickr.com/photos/68751915@N05/6355404323

For information on filing your tax return, see my Family Child Care Tax Workbook and Organizer.