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Knowing AFC year-end tax preparation strategies can help reduce your taxes and ease the stress associated with the tax deadline and the amount due. Care Provider Solutions, an adult foster care home business consulting provider, had the opportunity to talk with tax professional Sabrina Wilcox with AdminBooks. We discussed tax strategies and tips to reduce taxes and increase profits for your Adult Foster Care Homes.
Is the current structure for your AFC Homes the most optimal for your situation? If you are opening and operating adult foster care homes, talk with your tax professional to make sure the entity set up is the best for your residential assisted living facility.
Consider taking advantage of this while the tax laws are favorable to achieve up to 100% write-off for your adult foster care company in the year of acquisition (equipment, vehicles, etc.).
Consider “pushing” expenses to the current year to reduce taxable profit, especially if you expect this to be a higher profit year than next year/future years. What does this mean? Consider paying bills due in 2023 before the end of this year.
Consider making changes before year-end to help optimize your tax situation for the year. A professional tax advisor can help you determine what is best for you.
Consider increasing the fees you are charging at your adult foster care community or offering optional services such as respite or adult day care services (although this won’t save tax, there may be good reasons to follow this suggestion- for example, being able to pay more towards social security via FICA/SE tax, or to utilize prior year unused carryover business losses).
Consider using accounting software to keep track of all activity and reduce your profits. Include all expenses “ordinary and necessary” to the business. Keep appropriate records in the event of an audit.
Double check with a tax professional if you provide foster care for adults with disabilities or senior care services in your home – some of your income may be nontaxable if you meet certain requirements.
Paying excessive taxes is a drag and highly stressful. Contact your professional tax accountant. Discuss these year-end tax tips to help you optimize your tax situation as an adult foster home provider for this year and for years to come.
About Sabrina: Sabrina Wilcox from AdminBooks graduated from Central Michigan University in 2007, after which she took the necessary coursework to sit for the Certified Public Accountant (CPA) exam. After passing the CPA exam in 2009, she joined a small CPA firm and gained experience in multiple areas, including bookkeeping, payroll processing, financial statement preparation, auditing, and tax preparation. She obtained licensure as a Certified Public Accountant in the State of Michigan in 2010. Sabrina joined AdminBooks in June of 2015, and she has worked primarily in the tax arena since that time, preparing and reviewing multiple different types of returns (individual, corporate, partnership, trust/estate, and nonprofit) and assisting with tax planning and consulting. She enjoys developing strong working relationships with clients and helping to solve problems and provide peace of mind through her highly detail-oriented approach to her work.
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