Tax Paperwork To Give Families

[Abigail]

This is my first year in daycare. I know I need to give parents a "W-10 Dependent Care Provider's Identification and Certification" http://www.irs.gov/pub/irs-pdf/fw10.pdfif they request it, but I'm going to give it to everyone to be proactive. I noticed their is no place to put how much they paid for child care services on this form.

Somehow I came across "Form 2441: Child and Dependent Care Expenses" http://www.irs.gov/pub/irs-pdf/f2441.pdfon the IRS website and this has a place to list how much was paid. Do I need to give parents both of these forms? If not, how do I know they're not claiming more than what they paid for child care services?

Also, when I'm filling out my W-10's what date should I put? A December 2012 date that I'm doing now or wait until the day I give it to them in January for 2013? Does it matter if I put today's date but give it to them in January sometime? When is my deadline to get this to parents? Also, if I have an employee who brings her child sometimes and doesn't pay any child care fees, thus has no contract with me for her child I'm not required to give her any paperwork regarding child care only employment right?

[EchoMom]

Good question, I want to know too. Do you have to give parents the amount they spent if they ask for it, or can you say sorry you should have kept your own records? I know you do have to give them your EIN.

And looking at the 2441, so no matter how much parents spent, they can only claim $3,000? And then of that can only actually deduct the percentage they're allowed to?

So HYPOTHETICALLY couldn't I only claim my income as $3000 from each of my customers? HYPOTHETICALLY

[Scout]

Our provider just always gave us her ssn & the amount we spent, along with her full name and address.

[frugalmama4]

Do you have MMK? If so just print off form W-10.

If not you can find a blank form W-10 on the irs.gov website and fill in the information.

I also type up a document to have parents sign...something like this.

A total of $________ was received by ***X family child care provider for the care of _______________________________ for 2012.

The parent/guardian has received the original signed W-10 form in order to claim the child tax credit.


Provider identification number 00000000



_________________________________
Parent/Guardian Date

What every you do keep a signed copy for yourself too.

[MarinaVanessa]

One of the reasons that I love Minute Menu Kids Pro is that you can print out W-10's and the program enters the amount they paid right on it. Before I had the program I would add up each family's totals and write it on each family's W-10. I'd sign it and then make a copy of it and have the parent sign my copy so that just in case they tried to put in their own amount later I had proof of what was given to them.

I would also recommend against giving out your SSN to clients. You can google EIN and apply online for a tax ID number instead. It's attached to your SSN so you can give that number out to clients instead of your actual SSN and they can put that on their taxes. It only takes a few inutes and you get your tax ID number right away. This way you are better protected.

The online application site is down for maintenance until Jan 3rd but you can wait until then to apply for one or you can call the phone number to apply for one over the phone. It takes a little longer this way but not by much and it's mostly all touch dial. Sometimes you get a live person on the phone and they ask you why you need one if you don't have employees but if you explain that you are a family child care provider and don't want to give your SSN out to clients they understand. If you call I'd download an EIN application and fill it out and use it as you are on your phone since everything on the application they ask you on the automated recording.

[TomCopeland]

W-10

This is my first year in daycare. I know I need to give parents a "W-10 Dependent Care Provider's Identification and Certification" http://www.irs.gov/pub/irs-pdf/fw10.pdfif they request it, but I'm going to give it to everyone to be proactive. I noticed their is no place to put how much they paid for child care services on this form.

Somehow I came across "Form 2441: Child and Dependent Care Expenses" http://www.irs.gov/pub/irs-pdf/f2441.pdfon the IRS website and this has a place to list how much was paid. Do I need to give parents both of these forms? If not, how do I know they're not claiming more than what they paid for child care services?

Also, when I'm filling out my W-10's what date should I put? A December 2012 date that I'm doing now or wait until the day I give it to them in January for 2013? Does it matter if I put today's date but give it to them in January sometime? When is my deadline to get this to parents? Also, if I have an employee who brings her child sometimes and doesn't pay any child care fees, thus has no contract with me for her child I'm not required to give her any paperwork regarding child care only employment right?

You are not required to give parents Form W-10, even if they ask you. It's the parent's responsibility to give you this form. It's also the parent's responsibility to get their own Form 2441. Some providers fill out the W-10 on their own and give it to the parents. If you do this, put a January date on the form. You are also not required to give your employee any forms regarding their own child.

See my article on this:http://www.tomcopelandblog.com/2011/...-receipts.html

[TomCopeland]

Parent payments

Good question, I want to know too. Do you have to give parents the amount they spent if they ask for it, or can you say sorry you should have kept your own records? I know you do have to give them your EIN.

And looking at the 2441, so no matter how much parents spent, they can only claim $3,000? And then of that can only actually deduct the percentage they're allowed to?

So HYPOTHETICALLY couldn't I only claim my income as $3000 from each of my customers? HYPOTHETICALLY

You are not required to give parents a receipt of how much they paid you for 2012. Although it's true that a parent can only claim up to $3,000 for one child regarding their child care tax credit, you must claim all the money they paid yo as income!

[Holiday Park]

Ok so even if Im not required to give the parents an amount of what they paid, isn't better to at least do so on a paper they sign so I have proof of what they paid, so the irs doesn't come after me if they try to claim way more than they actually paid ?
I have one client who only pays in cash and refuses to pay by check ( I like checks better for documentation on my end) . So for last years income (for each parent ) I received I filled out a form I found on the daycarelady.com website called summary of payments and is a very nice word document with all 52 weeks with slots to enter payment amounts with date/late fees/check #, comments, etc.... And the parent and provider both sign it.

[Blackcat31]

Ok so even if Im not required to give the parents an amount of what they paid, isn't better to at least do so on a paper they sign so I have proof of what they paid, so the irs doesn't come after me if they try to claim way more than they actually paid ?
I have one client who only pays in cash and refuses to pay by check ( I like checks better for documentation on my end) . So for last years income (for each parent ) I received I filled out a form I found on the daycarelady.com website called summary of payments and is a very nice word document with all 52 weeks with slots to enter payment amounts with date/late fees/check #, comments, etc.... And the parent and provider both sign it.

As long as you kept accurate records of what a parent paid you along with your attendance records, it doesn't matter one bit what a parent claims.

That is their burden to prove NOT yours. Kwim?

[TomCopeland]

Parent receipt

Ok so even if Im not required to give the parents an amount of what they paid, isn't better to at least do so on a paper they sign so I have proof of what they paid, so the irs doesn't come after me if they try to claim way more than they actually paid ?
I have one client who only pays in cash and refuses to pay by check ( I like checks better for documentation on my end) . So for last years income (for each parent ) I received I filled out a form I found on the daycarelady.com website called summary of payments and is a very nice word document with all 52 weeks with slots to enter payment amounts with date/late fees/check #, comments, etc.... And the parent and provider both sign it.

I agree. It is a good idea to get parents to sign a receipt for your tax records.

[Abigail]

Why can parents only claim $3,000 per child per year as a tax credit? No full time child care would cost less than that. I understand the point of putting the dollar amount for each child now if that's the case because I have a full time preschooler and just the last few weeks a newborn sibling so even though they paid well over $6,000 they can't claim more than $3,000 for the preschooler and only claim the amount paid over the few weeks for the newborn, right?

How does the child care tax credit work in general? Is their something specific parents get when they have another child before the end of the year like the one newborn I now have?

[MarinaVanessa]

Why can parents only claim $3,000 per child per year as a tax credit? No full time child care would cost less than that. I understand the point of putting the dollar amount for each child now if that's the case because I have a full time preschooler and just the last few weeks a newborn sibling so even though they paid well over $6,000 they can't claim more than $3,000 for the preschooler and only claim the amount paid over the few weeks for the newborn, right?

How does the child care tax credit work in general? Is their something specific parents get when they have another child before the end of the year like the one newborn I now have?

I think it's because there is a Child Tax Credit AND a Child Care Credit that a parent can claim. You can claim both at the same time. The Child Care Tax Credit lets you claim the amount that you paid for child care as a deduction (up to $3,000) and the Child Tax Credit is just a deduction that you get simply because you have children. Even as a provider make sure that you are claiming the Child Tax Credit for any dependent children you may have.

I think it's a nice perk that doesn't need to be given, it's just a nice break to get when you have kids and pay for daycare.

[TomCopeland]

Child care tax credit

Why can parents only claim $3,000 per child per year as a tax credit? No full time child care would cost less than that. I understand the point of putting the dollar amount for each child now if that's the case because I have a full time preschooler and just the last few weeks a newborn sibling so even though they paid well over $6,000 they can't claim more than $3,000 for the preschooler and only claim the amount paid over the few weeks for the newborn, right?

How does the child care tax credit work in general? Is their something specific parents get when they have another child before the end of the year like the one newborn I now have?

Parents can only count up to $3,000 of child care expenses for one child ($6,000 for 2 or more) towards their child care tax credit because that's all that Congress will allow. Congress extended this law as part of the fiscal cliff negotiations. This means that the amounts parents above above these numbers does not get them a higher credit. The credit is based on what they paid, not when their child was born. There is another tax credit called the Child Tax Credit that does give parents a credit based on how many children they have, not how much they paid for child care. So, the new born is eligible for the Child Tax Credit, but not the Child Care Tax Credit. To claim either credit, the parents must fill out tax forms when filing their tax return.

Here's an article that explains all the tax credits for parents: http://www.tomcopelandblog.com/2011/...x-credits.html

[Holiday Park]

As long as you kept accurate records of what a parent paid you along with your attendance records, it doesn't matter one bit what a parent claims.

That is their burden to prove NOT yours. Kwim?

Ok , good. So that means this year I need to have my cash paying DCM to anitial (or should it be s full signature? ) for each payment I get every week. I can use that same form (that lists each payment for each of the 52 wks) to jot down the info each week. All last year 2012 I used my i-phone "notes" APP to track all payments from my 3 clients.
I also think getting an anitial for the cash payments is wise, because I can't prove anything either on my end , if she tried claiming more in a situation where if care was given for a short period of time and /or she decided to terminate care and be unable/willing to sign at the end of the year. Documrnting on real paper forms this time (in a binder) seems like it will be much easier this time.
Last night I went and bought two of this little coupon organizer things . One for check payments (I keep them after doing imaging deposit on my phone) and supply purchase receipts . I was slack for 2012 and didn't save anything reciepts for any purchases . I also bought two 100$ fates from babiesrus and don't even know if I saved the receipts. As well as 3 area rugs from walmart , not to mention all the yard sale & craigslist items .

[Blackcat31]

Ok , good. So that means this year I need to have my cash paying DCM to anitial (or should it be s full signature? ) for each payment I get every week. I can use that same form (that lists each payment for each of the 52 wks) to jot down the info each week. All last year 2012 I used my i-phone "notes" APP to track all payments from my 3 clients.
I also think getting an anitial for the cash payments is wise, because I can't prove anything either on my end , if she tried claiming more in a situation where if care was given for a short period of time and /or she decided to terminate care and be unable/willing to sign at the end of the year. Documrnting on real paper forms this time (in a binder) seems like it will be much easier this time.
Last night I went and bought two of this little coupon organizer things . One for check payments (I keep them after doing imaging deposit on my phone) and supply purchase receipts . I was slack for 2012 and didn't save anything reciepts for any purchases . I also bought two 100$ fates from babiesrus and don't even know if I saved the receipts. As well as 3 area rugs from walmart , not to mention all the yard sale & craigslist items .

I give out receipts for every payment made (cash, check, money order and/auto payments) then I enter them into MMK and give each parent a year end statement with their yearly totals.

I print out two copies.

One for them and one for me. I have them sign the one I keep with their full name (child's name too if different last name than parent) and date it.

HTH