RC Tax Solutions

Day Care Owner

Tax Preparation Checklist

Filing your taxes can be challenging, but the right checklist makes it easier. To prepare, you’ll need to:

  1. Find out when your taxes are due.
  2. Gather the appropriate tax forms.
  3. Collect your business income records.
  4. Gather your receipts for business expenses.
  5. Request an extension if needed.

Use the list below to compile the documents you’ll need to file.

General Documents
  • Owner information (name, SSN/EIN, address)
  • Prior-year return
  • Bank & credit card statements
  • Business licenses & permits
Financial Statements
  • Profit & Loss (Income Statement)
  • Balance Sheet
  • Cash flow summary
  • Payroll reports (if applicable)
Business-Related Expenses
  • Supplies, food, toys, curriculum
  • Rent, utilities, insurance
  • Vehicle mileage/expenses (business use)
  • Repairs & maintenance
  • Professional fees, training, advertising
Tax Forms
  • Form 1040 + Schedule C (sole proprietor) or entity forms
  • Schedule SE (self-employment tax)
  • 1099-NEC/INT, W-2/W-3 & payroll filings (if applicable)
  • State & local filings

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Important Legal Tax Obligations for Childcare Centers

Childcare centers must comply with federal and state requirements. At the federal level, most centers need an Employer Identification Number (EIN) for tax reporting, payroll, and banking. Income tax filings depend on your legal structure (sole proprietor, partnership, corporation). Employment taxes (Social Security & Medicare) must be withheld and reported for employees.

State obligations vary by jurisdiction and can include state income/franchise taxes, sales/use taxes on certain services, and annual reports. Staying informed and keeping documentation organized helps you remain compliant and financially sound. Consulting a tax professional like RC Tax Solutions is a smart way to navigate the rules confidently.

Some of the Deductible Daycare Business Expenses Include:

Supplies
  • Educational toys, books, art & craft materials
  • Cleaning & sanitation products
  • Snacks/meal ingredients (business program costs)
Facility costs
  • Rent or mortgage interest (business portion)
  • Utilities, internet, phone (business portion)
  • Insurance & security
Vehicle expenses
  • Standard mileage for business trips (pick-ups, supply runs)
  • Or actual expenses (fuel, maintenance, insurance) allocated to business use
Capital purchases
  • Furniture, playground equipment, major appliances
  • Computers/tablets for administration
  • Depreciation or Section 179 where eligible
Educational materials and supplies
  • Curriculum, worksheets, software subscriptions
  • Classroom decorations & learning centers
Business fees
  • Licensing, background checks, compliance fees
  • Accounting, legal, and payroll services
  • Marketing & advertising
Depreciation deductions
  • Spread the cost of long-term assets over their useful life
  • Consider Section 179 and bonus depreciation where applicable

Here’s a Summary of Tax Credits to Consider for Childcare Providers

Credits reduce tax owed dollar-for-dollar. Ask RC Tax Solutions which ones fit your situation.

The Employee Retention Tax Credit (ERC)

For qualifying periods impacted by government orders or revenue decline (subject to program rules and time limits).

Bonus depreciation

Accelerate deductions for qualifying new/used property placed in service (phase-down schedule applies).

Retirement plans startup costs tax credit

Credits available for starting a qualified plan (e.g., SIMPLE/SEP/401(k)) and for employer contributions (limits apply).

Energy efficiency renovations

Potential federal/state incentives for efficient HVAC, windows, insulation, and other improvements.

Commercial Clean Vehicle Credit

Credit for qualifying clean vehicles purchased for business use (meets IRS specs and sourcing rules).

Educational assistance programs

Tax-favored benefits for employee education/training programs (within IRS limits).

Record Keeping and Documentation Best Practices for Tax Preparation

Accurate records are the foundation of smooth tax filing. Maintain organized income & expense logs, invoices, and receipts throughout the year. Keep employee payroll and benefit records current, and store documents securely.

Clear documentation helps you substantiate deductions and claim every tax break available to your childcare business. RC Tax Solutions can set up a simple bookkeeping workflow that fits your day-to-day operations.

Daycare Receipt and Tax Statements

Families may request annual daycare receipts for the Child and Dependent Care Tax Credit. Provide a summary of payments received (Jan 1–Dec 31) with your business name, EIN, and address so parents can claim their credit.

Remember: a tax credit reduces tax owed directly and can be worth hundreds or thousands to families. Good records help your clients and your business.

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