Prepay child and dependant care

amother

Peachpuff

Tue, Jan 25 2022, 9:44 am

I run an "on the books 100%" small family based babysitter.
I file as self-employed.
My accountant told me that I should NOT allow this at all.
Possibly in large schools or daycares it would be fine.
But my small business in which I average around $4000, having 1 month (December) that I bring in $20,000 and then no income for the next 6 months would 1)raise MY 2021 tax bracket level. Taxes that I pay at a higher rate anyway because Im self employed. 2) complicate my books and taxes for 2022.

causemommysaid

Tue, Jan 25 2022, 10:06 am

Until the year before first grade private school counts along with any legal daycare or babysitter willing to report and give a ss#

After that just camp counts

According to FSA rules you need proof of when the childcare happened and you only get reimbursed after the fact.

If you aren't running your money through an employer run FSA the rules may be different and it could be perfectly fine.

An accountant who files your taxes should build tax planning advice into his price otherwise he isn't doing his job. Filing taxes includes providing your customers with money saving tax options which may come up at other times not just during filing. I never heard of such a ridiculous policy.

amother

Freesia

Tue, Jan 25 2022, 10:08 am

causemommysaid wrote:

An accountant who files your taxes should build tax planning advice into his price otherwise he isn't doing his job. Filing taxes includes providing your customers with money saving tax options which may come up at other times not just during filing. I never heard of such a ridiculous policy.

Some accountants charge a $100 flat rate for filing simple taxes. Ppl shop around for that low price. It’s advertised as simply a tax filing accountant.
I pay my accountant much more and expect more services. But many ppl do not.

causemommysaid

Wed, Jan 26 2022, 11:07 pm

amother [ Freesia ] wrote:

that doesnt sound like an accountant. It sounds like a tax filing service like Liberty Tax or something. Those are mostly geared towards people with very low income getting large refunds who walk in off the street with a single W2 or 1099.

Part of being a tax accountant is tax planning. That is more important than the 40 minute 1040 efile.

I honestly think that if a real accountant is doing just tax filing with no planning they aren't doing their job at all. They are costing their customers thousands of dollars in savings.

Any real accountant should be presenting their customers with information on FSA, HSA, IRAs, Roth IRAs, EIC, Child credits, Interest Deductions, College Savings Plans, Charity grouping, Prepaying certain bills, Education credits, Energy credits, etc.

amother

Mimosa

Wed, Jan 26 2022, 11:20 pm

amother [ Eggplant ] wrote:

Is the preschool in a regular school?
If it's only a preschool, it's for sure not shtick.
It's probably not shtick if it's preschool in a regular school, I'm just trying to find out before I do it.

Yes, in a regular school.

amother

Lightcoral

Wed, Mar 30 2022, 12:58 am

Bumping this thread up, as I have a related question.
I pay tuition for my 3 kids in full at the beginning of the school year. I pay a lump sum that I negotiate with the school. One of the kids is in preschool, how could I get a tax credit for this? There isn't a breakdown of exactly what I'm paying for each kid individually. Anyone has done this or know how to?

amother

Sage

Wed, Mar 30 2022, 12:59 am

amother [ Lightcoral ] wrote:

I emailed my childrens school and asked them how much I paid for each kid. They were happy to tell me.