Taxes got you spooked? 

The spooky season is upon us, but you know what can be even scarier than ghosts and goblins? Taxes! The tax deadline and the amount due can send shivers down your spine! But fear not; today we will shed some light on year-end tax preparation strategies that can help reduce your taxes and ease the stress.

Care Provider Solutions, your trusted adult foster care home business consulting provider, recently had a fang-tastic conversation with the tax professional, Greg Scholten of On Track Accounting Solutions. He brewed up some strategies and tips to help you reduce taxes and increase profits for your Adult Foster Care Homes. So, grab your broomstick (or calculator) and let’s dive in!

Entity Type – Choose the Right Potion for Your AFC:

Is your current entity structure for your AFC Homes the best for your organization, or is it a tax monster lurking in the shadows? If you’re opening and operating adult foster care homes, it’s essential to talk with your tax professional to ensure the entity setup is right for your residential assisted living facility. Don’t let the wrong entity type haunt your financial success.

Minimize Taxable Profit – A Spell for Savings:

Consider using accelerated (bonus or Section 179) depreciation to magically achieve up to a 100% write-off for your adult foster care company in the year the purchase was made (equipment, vehicles, etc.). Review your goals with your tax professional on whether to take advantage of this while the tax laws are favorable – it’s like a potion to reduce your taxable profit and keep more money in your cauldron!

Timing of Expenses – A Witch’s Brew of Savings:

Think about “pushing” expenses to the current year to reduce your taxable profit, especially if you expect this to be a higher profit year than next year or future years. Meet with your accountant before the end of this tax year to determine if this strategy can make your tax liability less haunting.

Increasing Profitability – Brewing Up Success:

If your resident’s care needs have changed, request a new assessment from CMH and waiver agencies for a daily rate increase. If you have open beds, consider offering respite until a long-term placement is found. While this won’t save you from tax ghouls, there may be good reasons to follow this suggestion to increase your income for this year. It’s like adding a secret ingredient to your potion for financial growth!

Income/Expense Tracking-Warding off financial frights:

Keeping good books is the key to keeping the tax demons at bay. Consider using accounting software to keep track of all activity and reduce your profits. Programs such as Quickbooks, Xero and Freshbooks are simple to use. Include all expenses that are “ordinary and necessary” to the business. Keep appropriate records in the event of an audit and keep your business accounts separate from your personal accounts.  It’s like creating a magic spell to ward off the tax demons and keep your financial records in order.

Possible Nontaxable Revenue – Unveiling Hidden Treasures:

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. It’s like discovering hidden treasures in the darkness, making your financial future a little less spooky.

Next Steps – Summon Your Tax Wizard:

Paying excessive taxes is a drag and highly stressful. Don’t let the tax monsters haunt your AFC business. Contact Greg at On Track Accounting Solutions or your accountant before the end of this year to start your tax planning– they are your very own tax wizards. 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. With the right spells, your financial future can be brighter and less scary!

Wishing you a bewitchingly successful tax season!

Looking for other solutions to prevent sleepless nights

If taxes are not the only topic that haunts you, Care Provider Solutions can help. Our courses are tailor-made to address the very issues that tend to give AFC owners their share of restless nights and stress-induced frights.

Let us help you resolve your pain points. You don’t have to figure it out on your own.