How AFC Owners Can Stay On Track This Tax Season

Prevent Penalties and Protect AFC Profits

If you’ve ever felt that uneasy knot in your stomach while sitting across from your accountant at tax time, you’re not alone.

Adult Foster Care (AFC) home owners across Michigan know the feeling well. You’ve spent the year caring for residents, managing caregivers, meeting inspections, and staying compliant with Michigan AFC home requirements. But when tax season arrives, it can feel like one more mountain to climb.

For many, the challenge isn’t neglect—it’s timing. Residential Assisted Living AFC operators are so focused on resident care that financial organization often comes last. By the time December hits, receipts are scattered, expenses are half-recorded, and the fear of penalties or missed deductions creeps in.

That’s why Care Provider Solutions sat down with AFC accounting expert Greg Scholten of On Track Accounting for this month’s Table Talk episode:
🎥 “Tax Tips for AFC Homes.”

Greg’s mission is simple: help AFC operators avoid the most common tax mistakes and build the financial systems they need to protect their profits—and their peace of mind.

💡 The #1 Tax Mistake AFC Owners Make

Preventing penalties, interest, and missed deductions

According to Greg, the biggest financial mistake most adult foster care home owners make is waiting too long to organize their books.

“By the time some operators come to me, they’re carrying months of untracked expenses. We can fix it—but it costs time, money, and sometimes opportunities they’ve already lost.”

Late organization leads to penalties, interest, and missed deductions. It also makes it nearly impossible to make informed business decisions during the year.

The good news? Preventing these issues is easier than most AFC providers think.

📊 Four Simple Steps to Stay Organized and Stress-Free

Habits that prevent costly errors

There are four simple year-end habits that every licensed adult foster home provider can implement right now to prevent costly errors later.

1. Track Every Expense

Whether you use accounting software or a simple spreadsheet, track every purchase and payment. Include what it was for, who it was paid to, and how it relates to your AFC operations.

Start today—don’t wait until December. Clean, consistent records save you from the panic of trying to recall transactions months later.

2. Ask Before You Deduct

Only “ordinary and necessary” expenses qualify as business deductions. Greg explains:

“If it’s common in your industry and helpful to running your AFC home, it’s probably deductible—but always double-check.”

Examples include groceries for residents, medical supplies, facility maintenance, caregiver training, and safety equipment.

👉 Watch the clip on ordinary and necessary expenses

3. Meet Quarterly with Your Accountant

A quick check-in every few months can prevent surprise tax bills and keep your AFC home compliant. This proactive approach also allows you to plan for staff raises, repairs, or equipment upgrades with real data—not guesswork.

4. Avoid the Shoebox Trap

“If you bring me a shoebox full of receipts, I can still help you,” Greg jokes, “but you won’t get the insights you need to make smart business decisions.”

Digital systems make it easy to upload receipts instantly, categorize expenses, and create reports automatically—saving hours of work at year-end.

🧾 Why These Steps Matter for AFC Homes

How to create long-term facility stability

Financial consistency is just as vital to your AFC’s health as consistent caregiving. When records are accurate and up to date, you gain a true picture of your financial performance.

For adult foster care businesses, this leads to:

• Fewer penalties and interest charges

• More confident investments in staff, training, or resident activities

• Better decision-making for future growth

• Peace of mind knowing your home meets all financial compliance standards

These small actions translate into long-term stability. You can stop reacting to financial surprises and start planning strategically for growth.

🏡 A Day in the Life of a Prepared AFC Owner

Peace of Mind knowing your financials

Imagine it’s January, and instead of dreading your accountant’s call, you already have everything ready—reports printed, receipts categorized, and payroll summarized.

You sit down, review your numbers, and realize your AFC home has a clearer financial picture than ever before. Because you’ve tracked your “ordinary and necessary” expenses, you find deductions you would have missed last year.

Your accountant smiles and says, “You’re ahead of schedule.”

This is what happens when adult foster care home owners move from reaction to preparation. It’s not about perfection—it’s about consistency.

🎓 Beyond the Basics: What You’ll Learn in the Full Table Talk

Tax tips and strategies for AFC Homes

Inside the full Table Talk: Tax Tips for AFC Homes episode—available exclusively to AFC Mastermind Members—Greg Scholten dives deeper into the essential strategies that keep group homes for disabled adults compliant and financially healthy.

In the Full Episode, You’ll Learn:

• How to avoid costly penalties and interest that drain your profit

• The latest “Big Beautiful Bill” tax updates every AFC operator should understand

• Payroll and overtime changes for 2025 that affect caregivers and staffing budgets

• Why accounting software is essential for compliance and peace of mind

Greg’s practical advice empowers AFC owners to treat financial management as part of their caregiving mission—not a distraction from it.

💡 How to get access to the full episode AFC Tax Tips episode

Tools and coaching

🟩 AFC Mastermind Members get full access to Greg’s Tax Tips for AFC Homes episode, plus practical tools and coaching to simplify bookkeeping and strengthen compliance.
🎁 Join today and get access to your exclusive guide, “5 Key Tax Tips for AFC Homes.”

👉 Join AFC Mastermind to access the full episode

🧭 Why Financial Readiness is a Form of Care

Laying the foundation for AFC financial success

A financially stable AFC home doesn’t just protect its owner—it protects its residents and employees. When your budget is strong, payroll is timely, and tax compliance is secure, everyone benefits.

For providers passionate about opening and operating adult foster care homes, strong bookkeeping habits lay the foundation for success. And for those already established, mentorship and education through Care Provider Solutions’ AFC Mastermind ensures continued growth.

Our community connects operators across Michigan and beyond who are committed to bettering the adult foster care community through knowledge, accountability, and shared learning.

With mentoring for adult foster care providers, business consulting, and educational tools, AFC Mastermind helps you stay compliant while building a thriving home environment that meets and exceeds Michigan AFC home requirements.

🎯 Take Control of Tax Season

Network to lead with clarity, not chaos

Don’t let another year pass feeling unsure about your finances. By implementing these simple practices—tracking expenses, planning quarterly, and using accounting tools—you can eliminate penalties, protect profit, and regain peace of mind.

Your AFC home deserves to thrive, not just survive. Join a network that helps you lead with clarity, not chaos.

👉 Join AFC Mastermind Today and watch the full Table Talk: Tax Tips for AFC Homes