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This is probably one of the most significant financial decisions you can make in your life.

Therefore, you want to be fully informed of the consequences of your decision before you make it.

There is an excellent online calculator that can answer this question: www.opensocialsecurity.com

After you enter name, age, date of birth and the amount you are estimated to receive from Social Security at your full retirement age, the calculator will tell you the month and year you (and your spouse) should start claiming Social Security to get the maximum benefit over your lifetime.

You can find out how much you are estimated to receive from Social Security at your full retirement age by going to www.socialsecurity.gov and look at your annual statement.

You may also wish to consult with a financial planner or check with Social Security to confirm the results from this calculator.

I found this free calculator to be extremely helpful for my wife and myself. The results were confirmed by our financial planner.

Tom Copeland – www.tomcopelandblog.com

The post When should I claim Social Security benefits? appeared first on Tom Copeland's Taking Care of Business.

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Family child care providers start their business because they love children and want to care for them.

Many providers quit their business because they can’t make enough money.

Taking care of children is half your job. The other half is taking care of your business.

The most important thing you do is to provide quality care for children. With a good business foundation you’ll be able to continue doing this work for a longer period of time. It will enable you to support your family, perhaps retire earlier or be able to spend more time with children.

When you think about the business side of family child care, start by asking yourself this question: “What do you want from your work this year?”

Your answers might be:

  • More money, more paid or unpaid time off
  • Recruit more children
  • Terminate some children
  • Save for retirement
  • Reduce your stress
  • Have less conflict with parents
  • Other?

To get what you want you first have to identify what you want.

It’s not selfish to focus on what you want as a business. You care for your your spouse, your own children, your daycare children and maybe even your parents.

It’s time to care for yourself.

Are you sacrificing too much for others? Maybe. If you are giving all your time and money for others and not saving for yourself, then it’s time to rethink this. If you think there is no money to save for yourself, maybe it’s time to rethink how you run your business. If you haven’t raised your rates in three years, it may be time to do so now. If you don’t think you can make more money at what you are doing, maybe it’s time to think about taking on another job.

Set Goals

To start thinking about your business, set goals each year. What aspects of your business do you want to improve this year? Create a list. Your list might include: Raise rates, reduce expenses, enforce my late pick up fees, implement two marketing strategies, get business liability insurance, and so on. Pick one or two priorities and measure how well you did at the end of the year. Reset new goals each year. It’s never too late in the year to set goals.

You Can Do It

There is nothing about the business side of family child care that you can’t manage. You may need some help – tax preparer, insurance agent, or advice from other providers. But you were smart enough to start your own business. You manage multiple tasks: chef, activity manager, conflict manager, finance officer, shopper, and so on.

In the end, how you run your business is up to you. There are no strict rules about this. In my opinion, however, the stress associated with being a family child care provider is often the lack of attention paid to the business side of what you do.

Tom Copeland – www.tomcopelandblog.com

Image credit: https://www.jbsa.mil/News/Photos/igphoto/2000487974/

The post Taking Care of Business appeared first on Tom Copeland's Taking Care of Business.

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Family child care providers, like most people, generally haven’t done a good job at saving enough money for their retirement.

In a survey done for my book Family Child Care Money Management & Retirement Guide, 55% of child care providers had saved less than $10,000 towards their retirement goals. Of those child care providers who were in their 50s, 46% had saved less than this amount and only 22% had saved more than 100,000!

Here’s a quiz you can use to test how well you understand retirement planning.

1) All child care providers are eligible to set up a SIMPLE IRA.  True or False?

2) If you work nine years as a child care provider and this is your only work experience, you will not qualify to receive Social Security benefits. True or False?

3) The longer you wait to save money for your retirement, the more money you will need to save. True or False?

4) The maximum you can contribute to a Traditional IRA each year is $6,000 if you are age 50 or older. True or False?

5) Most experts believe that you will need to have about 70-80% of your current income in retirement to maintain your current standard of living. True or False?

6) Contributions to a Roth IRA are tax deductible. True or False?

7) In the long run, saving money inside an IRA will earn you more money than saving outside of an IRA. True or False?

8) The amount you pay in management fees on your retirement investment has a major impact on how much you will earn on your investment. True or False?

9) Because of the volatility of the stock market, it’s never a good idea to have more than 10% of your retirement funds invested in stocks. True or False?

10) Investing in individual stocks is more risky than investing in a stock mutual fund. True or False?

Rate yourself:

1-5 answers correct – Novice: time to bone up!

6-8 answers correct – Smart: good work!

9 answers correct – Expert: superior work!

10 answers correct – Master: fantastic!

How well did you score?

Tom Copeland – www.tomcopelandblog.com

 Image credit: http://401kcalculator.org

For more information about retirement planning, see my book Family Child Care Money Management and Retirement Guide.

The post Reaching Your Retirement Goals Quiz appeared first on Tom Copeland's Taking Care of Business.

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The answer is clear: if you want to spend less money on transportation over the long run, buy a car rather than lease one.

So why do some family child care providers lease?

Leasing upfront costs are lower and leases have lower monthly payments than if you buy a car. This makes leasing attractive because it allows you to drive a more expensive car than you might otherwise be able to afford if you are buying.

I understand the lure of driving a fancy car; television ads make it sound like it’s un-American not to have one. These ads focus on how little you can pay each month to lease. However, you should not base your decision to buy or lease on the amount of the monthly payment. Instead, look to the actual cost of your car over time. In the long run, leasing will always cost more.

The fact that you can deduct the business portion of the cost of your car lease does not make leasing less expensive than buying. Spending more to get a larger business deduction will reduce your taxes but will leave you with less money in the end. For example,  if you spent $1,000 more each year to lease rather than own a car, and you were able to reduce your taxes by $300, you would still have $700 less than if you hadn’t spent the money in the first place. In other words, giving $1,000 to the car company so you can get $300 from the IRS doesn’t make financial sense.

So, when you see others driving fancy cars down the road, think to yourself that they probably are spending more than you. Use the money you saved by buying your car for more important things in life.

If you do decide to lease, you have the same choice in how to claim car expenses as if you bought a car; use the standard mileage rate or the actual expenses method.

See my article on How to Establish a Car Replacement Fund. See also this article for more details on buying vs. leasing. For more information on claiming car expenses, see my Family Child Care Record Keeping Guide.

Tom Copeland – www.tomcopelandblog.com

Image credit: https://pixabay.com/vectors/passenger-cars-cars-automobiles-suv-154778/

Family Child Care Record Keeping Guide

The post Should You Lease or Buy a Car? appeared first on Tom Copeland's Taking Care of Business.

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Happy Provider Appreciation Day!

Thank you so much for the work that you do!

Over the past 35+ years I’ve met tens of thousands of family child care providers as I have traveled the country giving workshops.

I know that you work very long hours, often with limited financial rewards. I am always impressed with your dedication to your work. I have great respect for the tremendously difficult job you do with such love that often goes unacknowledged. Our society doesn’t value its children and those who care for them the way it should.

Provider Appreciated Day started in 1996 by a group of volunteers in New Jersey. Provider Appreciation Day is appropriately celebrated each year the Friday before Mother’s Day.

The founding organizers saw the need to recognize the tireless efforts of providers who care for the children of working parents.

I got into this field because I saw the need for family child care providers to better understand the business side of their work.  No matter how hard I work, however, my job is much easier than yours!

Congratulations on your dedication to young children! Thank you for helping make the world a better place for us all.

Tom Copeland – www.tomcopelandblog.com

Image credit: nafcc.org

The post Happy Provider Appreciation Day, May 10th! appeared first on Tom Copeland's Taking Care of Business.

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I’ve made a number of changes to my Family Child Care Record Keeping Guide to keep current with new tax laws. These include the new rules allowing most providers to avoid depreciating larger expenses, as well as updates on a variety of other topics.

The Family Child Care Record Keeping Guide has always been my most popular book. It identifies over 1,000 allowable business deductions and describes in detail how to keep track of business records throughout the year. It includes chapters on:

  • The Time-Space Percentage
  • Claiming food expenses
  • Hiring employees
  • Paying estimated taxes
  • Deducting house expenses
  • And more!

The book cover indicates it is still the Ninth Edition. The new updates changed about 10% of the book and thus are not significant enough to necessitate a new edition. You can tell if you have the latest version by looking at the copyright page to see if it says it’s been updated for 2019.

Tom Copeland – www.tomcopelandblog.com

Family Child Care Record Keeping Guide

The post Newly Revised Family Child Care Record Keeping Guide appeared first on Tom Copeland's Taking Care of Business.

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Summer is the time for vacations, family outings, gardening, reading, and just plain rest.

For many family child care providers, summer is a time to reduce their hours of operation.

Taking some time off in the summer may be based on personal choice, or it may be a necessity because of a reduced demand for services. Some child care parents may withdraw their children for summer camps or family vacations. Other parents, such as teachers, work fewer hours in the summer and plan to spend more time with their children.

What are the tax consequences of reducing your summer hours?

When you work fewer hours your income will go down. In addition, serving fewer meals and snacks means you will receive less reimbursement from the Food Program. One of the financial challenges of being a family child care provider is managing the ups and downs of your income as parents come and go.

Plan ahead when you know that your income will be less in the summer. Try to keep your expenses down during this time. Put aside some of the money you are earning the rest of the year to help you get through the slower summer months.

One of the biggest tax benefits of being a family child care provider is the ability to deduct a portion of your house expenses, including property tax, mortgage interest, rent, utilities, house insurance, house repairs, and house depreciation.

Time- Space Percentage

The amount of the deduction you can claim for these items is based on your Time-Space Percentage. This percentage is determined by how many hours you work in your home and how much space you are using in your home on a regular basis for your business.

If you are closed for a month or two during the summer, this should not make any difference in your space percentage. In other words, if you are using a bedroom for naps on a daily basis for ten months of the year and not at all for two months, you would still count this room as being used on a regular basis throughout the year.

If you are closed from a week to several months during the summer, this will have an effect on your time percentage. The fewer hours you work, the lower your time percentage, and ultimately the lower your home business deductions will be.

To help reduce this impact, keep careful track of all the hours you work during the summer. Include in this accounting all the hours children are at your home. This may be more complicated to track if you have children attending part days, or on an irregular basis.

Also, be sure to record all hours you are spending on business activities when the children are not present, including hours spent on activity preparation, cleaning, meal preparation, and special projects such as painting the playroom, building outdoor equipment, and reorganizing your records.

Regardless of the impact of reduced income and lower home deductions, it is a good idea to take time off each year for yourself. Family child care providers work very hard and you deserve some days of rest. Enjoy!

Tom Copeland – www.tomcopelandblog.com

Image credit: https://pxhere.com/en/photo/751664h

For more information on the Time-Space Percentage, see my book Family Child Care Record Keeping Guide.

The post The Consequences of Reduced Summer Hours appeared first on Tom Copeland's Taking Care of Business.

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“Reaching Your Retirement Goals” is my latest webinar that I’ll be offering on Wednesday, May 15th at 8:30 – 9:30pm Eastern Time.

In this webinar you’ll learn how to reduce your expenses, increase your income, save more money for your retirement, and choose the best IRA for your family.

Here’s what I’ll be talking about:

  • Identify ways to reduce expenses and increase income
  • Where to put money to meet long-term goals
  • Learn how to prioritize long-term financial goals
  • Understand the basics of retirement investing
  • IRA retirement plans for providers: Traditional IRA, Roth, SIMPLE, and SEP

Register here by 5/15/2019 3:00pm Eastern time.

This class is eligible for CEU credit. Contact NAFCC for details.

Member Price: $25.00
Nonmember Price: $40.00

100% tax deductible!

This price includes both the live webinar and a recording.

Proof of attendance will be automatically emailed the day after the webinar.

Clock Hours: 1 Hour (Training credit is only given for the live webinar.)

Details

Register for the webinar here.

Participants can ask me questions during the webinar and will receive a copy of the power point after the webinar.

The webinar is recorded, so you can listen to it later if you can’t attend live. To participate in the webinar you must be a member of the National Association for Family Child Care. You can join here.

These webinars are part of a monthly webinar series I conduct in partnership with the National Association for Family Child Care.

To see an overview of all the webinars, go here.

Tom Copeland – www.tomcopelandblog.com

For more information, see my book Family Child Care Money Management & Retirement Guide.


The post Reaching Your Retirement Goals Webinar, May 15th appeared first on Tom Copeland's Taking Care of Business.

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The most significant thing family child care providers can do to reduce their taxes in 2019 is to track all the hours they spend in their home doing business activities.

This includes all hours caring for children, from the moment the first child arrives to when the last child leaves.

But, it also includes all hours spent on other business activities when children are not present.

Why is this so important?

Providers can deduct the business portion of virtually all expenses associated with their home: property tax, mortgage interest, house insurance, rent, house repairs, utilities and house depreciation. This represents thousands of dollars of business deductions.

The business portion of these expenses is based on a Time-Space Percentage calculation using the number of hours you work in your home and the number of rooms you use on a regular basis in your business. That means, the more hours you work in your home, the higher your Time-Space Percentage, the higher your tax deductions, and the lower your taxes

What might be included in these other hours?

The list is long: cleaning, record keeping, activity preparation, meal preparation, time on the Internet (reading this blog post!), talking to parents or other providers on the phone, parent interviews, planning menus and preparing shopping lists, Food Program paperwork, doing work for your family child care association or union, doing work to receive NAFCC accreditation or CDA, general office work, shopping for business items online, and more.

Here are some other guidelines:

  • You must be in your home or on your property to count these hours. Time spent attending training classes away from your home don’t count, even though it’s a business activity.
  • You can’t count time twice. In other words, if children are sleeping and you are cleaning, you can’t count the cleaning time.
  • You don’t have to be the one doing the work. If you husband cleans up after the children on Saturday morning while you sleep in, you can count this time.

The general rule is that you can count hours spent on business activities in your home if you wouldn’t be doing this work if you weren’t in business.

This means you can’t count time mowing your lawn. You aren’t mowing your lawn more because you are in business, so the time doesn’t count.

If you shovel your sidewalk/driveway at 5am before the parents arrive, you could count this time because you wouldn’t be out at 5am doing this if you weren’t in business. If your husband shoveled the snow at 4pm when the children were in your home, you couldn’t count the time because you can’t count time twice.

Cleaning time is probably the most hours you spend on business activities when children are not present. You can count all cleaning time spent immediately before the children arrive in the more and immediately after they leave. Don’t count all the hours you spend cleaning your home. If you are cleaning the kitchen, bathroom and living room on Saturday and it takes you one hour, don’t count the full hour. Keep records of all cleaning hours, business and personal to help support your claim.

To track all of the business hours when children are not present in your home, record two months of these hours carefully on a calendar and use the average for these two hours for the rest of the year. See my article, “Have Your Tracked Your Hours for Two Months This Year?” I’ve also done a video, “Tracking Hours When Children Are Not Present Using Kidkare.”

Remember – Tracking hours when children are not present in your home is the most important thing you can do to reduce your taxes this year!

Tom Copeland – www.tomcopelandblog.com

Image credit: https://pxhere.com/en/photo/1290739

For a comprehensive discussion on how to track your business hours, see my Family Child Care Record Keeping Guide.

The post Can I Count Hours Spent Mowing My Lawn? appeared first on Tom Copeland's Taking Care of Business.

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I will be delivering several workshops for family child care providers and trainers as part of the National Association for Family Child Care conference in Orlando, Florida, June 19th – 22nd.

This annual conference offers dozens of workshops on all aspects of family child care, with special keynote presentations and many fun events.

Here’s my training schedule:

Trainer Training (also open to providers who aren’t trainers)

Mastering Record Keeping and Taxes

June 19th: 8am-12pm

  • How new tax rules significantly benefit providers
  • How to calculate an accurate Time-Space Percentage
  • How to claim maximum business deductions
  • The three most important record keeping tasks
  • Hiring employees, finding a good tax preparer, and more

Register here

How to Effectively Use Contracts and Policies with Parents

June 19th: 1pm – 5pm

This seminar will cover how to establish a business relationship with parents and get what you want out of your contract and policies as well as:

  • The four key elements that belong in each contract
  • The difference between a contract and policies
  • How to enforce your rules to resolve conflicts with parents
  • What is the difference between legal and illegal discrimination
  • How to handle parents who show up drunk, price fixing, holding fees, and more

Register here

Provider Training

How to Manage Your Money and Plan for Retirement
Thursday, June 20th: 1:30 – 3:00pm

This workshop will help providers better manage their money by reducing spending, developing savings habits, and setting financial goals. We will cover the basis rules of investing for retirement and identify the three main IRAs and explain how they differ.

What’s Good About Record Keeping: How to Save Time and Money on Your Taxes

Thursday, June 20th: 3:30pm – 5:30pm

Most family child care providers pay too much in taxes because they don’t keep the proper records and aren’t aware of what they can deduct. This workshop will review the significant changes in tax rules for 2019 and cover the three most critical record keeping tasks that will save time and money.

Conference Details
The Conference will be held at the beautiful Rosen Shingle Creek hotel in Orlando, Florida.

The rate is $159 per night (plus tax). Deadline to receive this rate is May 24, 2019. Make your reservation here.

What’s Deductible?

If you come to the NAFCC conference, or any other family child care conference, you should take advantage of the many business deductions associated with your attendance.

You can deduct the cost of travel to the conference (car, plane, train, bus) if the “primary purpose” of your trip is business. That means that more than half the reason for your trip must be to attend the conference. Count your travel days as business days.

So, lets’ say you left for Orlando on Wednesday, June 19th, attended the conference all day Thursday, Friday and Saturday, spent Sunday at the beach, and returned home on Monday June 24th. Since the two travel days can be counted as business days, you have six business days and one personal day. Clearly, the primary purpose of this trip is business and you can deduct 100% of your travel costs.

If you drive to Orlando, you can claim $.58 per mile round trip.

You can deduct 100% of the hotel costs at the conference if you travel alone. If you travel to Orlando with your family, you can deduct 100% of what it would cost for you to stay at the hotel alone. The cost to stay at the conference hotels $159 per night (plus tax). You can deduct the full $159 per night if you bring along your husband and two children. If the children stay in a separate room, you could not deduct the cost of the separate room.

You cannot deduct costs for the personal day you spent at the beach (hotel, food, transportation).

If you hire an employee, your husband or your own children to help you with your business, and they attend the conference, you can deduct their travel and conference expenses. They must work for you enough to justify the expense of the conference.

Other costs you can deduct for your trip to Orlando: taxis to and from the airport, conference registration fees, tips, and food costs.

You can claim food costs in one of two ways: use a daily per diem or use your actual food costs. The daily per diem for Orlando is $66. You can only deduct 50% of this amount. So, if you left home at 9am on Wednesday, June 19th and returned home on Monday, June 24th at 9pm, you were gone for 5.5 days, you could deduct $203.50 as a food expense  (5.5 business days x $66 per day = $363 x 50% = $181.50). You do not need food receipts to claim this deduction. If you saved receipts of your actual food costs, you can deduct 50% of your food receipts.

If you paid someone to care for your own children (who was not a family member) while you were in Orlando, you could claim this amount towards your personal child care tax credit. If you hired someone to care for your daycare children while you were gone, you can deduct their wages as a business expense.

Join Me!

I encourage everyone who can to attend this annual conference. You’ll meet other family child care providers from around the country. There are many workshops on a wide variety of topics (details of the workshops will come later).

Tom Copeland – www.tomcopelandblog.com

The post Tom Copeland to Speak at Annual NAFCC Conference in Orlando, Florida June 19th – 22nd appeared first on Tom Copeland's Taking Care of Business.

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