How to End Your Agreement with Parents

How to End Your Agreement with Parents

By Tom Copeland. Published with permission.

There is a right way and wrong way to end your agreement with a parent of a child in your care.

The right way is to follow the terms of your contract. If it requires you to give parents a two-week notice, do so. You and the parent can agree to end your agreement earlier than two weeks if you put it in writing and both sign it.
Here are three tips to follow to improve the chances that the ending of your agreement will go smoothly.
"Terminate at will"
While I recommend that you require parents to give you a two-week notice to end your contract, I also recommend that you do not restrict yourself to the same terms. Instead, put in your contract, "Provider may terminate at will." This gives you the flexibility to end your agreement immediately if the parent is threatening you, creating a disturbance for your business, or refusing to pay you for your services.
Refund payments?
You cannot charge parents for days that you refuse to provide care. Let's say you want to immediately terminate your contract with a parent. It's Friday. The parent has paid you for the past week and has paid you in advance for the last two weeks of care. If you tell the parent she can't come back on Monday, you are obligated to refund her the amount she paid you for the last two weeks.
Did you or the parent terminate care?
Sometimes there is miscommunication between a family child care provider and a parent. If you are in a conflict situation with a parent and are considering terminating care, be sure you communicate clearly. Let's say the parent owes you money for care from last month and you are struggling to collect it. Your contract requires the parent to give you a two-week notice while you may terminate "at will."
When you try to discus this payment issue today, the parent is vague about when she can pay you. You then make one or more of the following statements:
"I can't wait any longer for your payment."
"I've had enough. I don't think I can go on like this."

"You must pay me by tomorrow or I'm going to have to end our agreement."

It's possible that the parent will conclude from any of these statements that you have terminated your agreement the day of this discussion. Let's say the parent doesn't show up tomorrow and you don't hear anything more from her. Has she effectively given you a two-week notice because she hasn't returned? Did you terminate her?
If it's not your intent to terminate your contract immediately, it's important to be clear to the parent that you expect her to bring her child to your program the next day ("I'll see you and your child tomorrow.")
If you are terminating immediately, you cannot expect any payment from the parent for care after that day.
What if, in response to any of your comments above, the parent says, "I'm not coming back." If you want to be able to collect payment for the next two weeks, you need to come to an understanding that the parent is giving her two-week notice. Therefore, say to her, "Does this mean you are giving me your two-week notice?" If the parent agrees, then either write up a short note that says this and get the parent to sign it, or send the parent an email indicating that you are accepting her two-week notice.

If a parent is not showing up for care and has not given you an official notice to end your agreement, send the parent a note, asking for clarification. If you are willing to continue to provide care say, "I have not ended our contract. You are welcome to continue to bring your child to my program. If I do not hear back from you within a week, I will assume you have given me your two-week notice and I will then proceed to take legal action to collect what you owe me under our contract."

If you don't want the parent to return, say, "I'm sorry we couldn't agree to continue our agreement. I'm no longer providing care for your child." Then say either, "You owe me $ under our contract," or "I'm refunding you $ for the days you paid for care after the end of our agreement," or "You do not owe me any additional money."
The language you use is important to be clear whether you or the parent is ending your agreement.
Image credit: whatafy.com

For more information about contracts, see my book Family Child Care Contracts and Policies.
www.tomcopelandblog.com

Conduct a Household Inventory to Save Money

Conduct a Household Inventory to Save Money

By Tom Copeland, published with permission

There are thousands of dollars worth of tax deductions sitting in your family child care home, waiting for you to report them on your tax return.

These deductions are household items that you are using in your business. These include your washer, dryer, refrigerator, stove, television, beds, tables, chairs, lawn mower and snow blower. In addition to furniture and appliances, you can also include rugs, lamps, bedding, silverware, pots and pans, curtains, towels, tools, and so on.

Anything that you owned before you went into business that is now being used in your business can be claimed as a business expense by depreciating it.

Household items are depreciated over 7 years. If you are using these items for both business and personal use, apply your Time-Space Percentage before depreciating them.

If you are a new child care provider -

Conduct an inventory of all household items by writing them down. This job can be made easier by using my Family Child Care Inventory-Keeper. It is an easy-to-use log that enables you to track your household items by room. In addition, take pictures of each room in your home (including your basement and garage).

Estimate each item's value as of the day you first started using it in your business. Use thrift store or garage sale prices. You don't need a receipt to depreciate these items.

This may seem like a lot of work, but it is well worth your time.

Let's say the value of all your household items was $10,000. If your Time-Space Percentage was 40%, you can depreciate $4,000 ($10,000 x 40%) as a business expense over 7 years. This represents approximately $570 in tax deductions each year for 7 years.

Many child care providers fail to take advantage of the tax rules that allow you to depreciate household items they owned before their business began. Turn over your inventory to your tax preparer and have him/her calculate the depreciation deduction. If you do your own taxes, use my annual Family Child Care Tax Workbook and Organizer to calculate your deduction.

If you have been in business for a number of years, but have not claimed this depreciation deduction, I will be writing a future article on how to recapture these expenses.

Image credit: www.redleafpress.org

For information, see my book Family Child Care Tax Workbook and Organizer.

www.tomcopelandblog.com

Tax Resources for Small Businesses

The redesigned IRS.gov makes finding information easier than ever.
Check out:

• Recommended Reading for Small Businesses  
• Small Business Forms and Publications 
• Help & Resources  

And now, just click the heart graphic on any page to save it as a bookmark.

Tax Resources for Small Businesses

Small Business and Self-Employed One-Stop Resource
Small Business Forms & Pubs
Small Business Events
e-File for Businesses and Self-Employed
Businesses with Employees
Small Business Products
Self-Employed Individuals
S Corporations

DISABLE ACCES CREDIT, BARRIER REMOVAL TAX DEDUCTION

Are You Taking Advantage of the Disabled Access Credit?

By TOM COPELAND. Published with permission.

Did you know that there are two tax rules that benefit family child care providers who spend money caring for children with disabilities?

All child care providers (whether regulated or not) must comply with the Americans with Disabilities Act (ADA).

You must provide "reasonable accommodations" to children with disabilities. Such disabilities include: cerebral palsy, deafness, diabetes, alergies, emotional or mental illness, epilepsy, HIV, AIDS, learning disabilities, blindness, mental retardation, and more.

Most family child care providers have cared for children with disabilities during their career. In the vast majority of cases, it is no big deal. In some situations it may require spending money to make the home more accommodating.

Such expenses made to comply with the ADA can include: Braille books, books on tape, grab bars, bathroom remodeling, wider doorways, ramp, etc.

The IRS Disabled Access Credit allows you to take a 50% tax credit on such expenses over $250 and up to $10,250, for a maximum credit of $5,000.

Use IRS Form 8826 Disabled Access Credit to claim this credit. The credit may not be used to build a new home. The amount of credit from this form gets transferred onto IRS Form 1040.

Here's an example: You spend $2,000 to remodel your bathroom by installing some grab bars next to the toilet and in the bath tub, and widening the bathroom door so a wheelchair can enter. You are entitled to a $875 tax credit ($2,000 - $250 divided by 2). This credit will reduce your taxes by $875. Without this credit, you would have had to depreciate these items over 39 years.

Barrier Removal Tax Deduction

There is a second tax benefit called the Barrier Removal Tax Deduction. This allows you to claim a deduction of up to $15,000 for certain expenses on Schedule Ce, instead of depreciating them over a number of years.

Expenses that qualify for this deduction are limited to removing architectural and transportation barriers such as building a ramp, remodeling a home, or converting a van.

Here's an example: You spend $1,000 to make your van accessible for a wheelchair. Without this tax benefit, you would have to depreciate the $1,000 over 5 years (using the actual car expenses method).

If you didn't spend money on remodeling your bathroom you could claim the credit for this expense ($1,000 - $250 divided by 2 = $375).

If you did both projects, you would add up the total expense ($3,000) and subtract the amount of the credit claimed ($875) = $2,125. This is the amount to be deducted on Schedule C.

By taking advantage of these two tax benefits, you can make caring for children with disabilities a little easier.

Image credit: getagripfl.com

For more information, see my Family Child Care Tax Workbook and Organizer.

Posted by Tom Copeland at 04:53 PM in Record Keeping & Taxes | Permalink
Tom Copeland, www.tomcopelandblog.com

CHILD ABUSE, CHILD ABUSE PREVENTION, SHAKEN BABY SINDROME,

• Childhelp National Child Abuse Hotline
• What is Child Abuse?
• Who Do You Trust With Your Child
• Shaken Baby Syndrome
• Child Abuse Prevention
• Help for Kids
• Help for Parents & Caregivers
• Help for Professionals
• Child Abuse Prevention Resources
• Adult Survivor Resources
• Parenting Resources
• Bullying Resources
• Blow the Whistle on Child Abuse
• Help with Teen Bullying and Abuse

Where to report child abuse.

Where to report child abuse. List for all states in USA
http://www.childwelfare.gov/pubs/reslist/rl_dsp.cfm?rs_id=5&rate_chno=W-00082

ALERTS: You are a mandated reporter...Use an approved CPR trainer...

A DCFS Licensing Representative set us this alerts

I am sending this to all of my providers. You first and above all else are mandated reporters. If you are aware of a provider who is out of compliance, in which it could be potentially damaging to the children in their care; you have a duty to act on behalf of those children. If you are aware of a daycare that is unlicensed, that too is also potentially damaging to children. One provided is about to lose her only source of income because this worker was not informed when other licensed providers were aware of this providers issues, and yet failed to inform this worker of those concerns. I could have done some preventive maintenance that may have resulted in violations but not the revocation or surrendering her license. If you are aware of something that could be a concern no matter what you may think of the person or what your relationship is with that person; it is better to be safe, cautious, and remember those children come First. This is the responsibility of a mandated reported.

Second always use a CPR/First Aid provider who is approved by either the American Red cross or the American Heart Association.

Factors of Financial Success

7 Key Factors of Financial Success by Tom Copeland

By Tom Copeland, published with permission

Here are I made in my keynote presentation at the 14th Annual Child Care Business Expo in Chicago last Saturday. The conference was sponsored by the Women's Business Development Center.

We are in the midst of great financial stress - nationally, state-wide and within our families.

Family child care providers primary motivation is to care for children and you want to do the best possible job you can.

But, to do this work you need to make money to support yourself and your own family. They go together.

If you want to care for children, then you must also take care of business. If you don't care for business, in the long run, you won't be able to care for children.

Child Care Trends

There is growing competition among child care programs (homes, centers, pre-school, license-exempt care, and illegal care) at the same time there is shrinking public support for child care from federal and state government.

Parents looking for child care have more choices than they have had in years. They are asking prospective caregivers, "Why should I enroll my child in your program? What does your program offer that others don't?" Your ability to answer these questions will largely determine how successful your business will be.

Seven Key Factors of Financial Success

Someone who:

1) Operates a high quality program

You will not be successful in the long run if your program isn't high quality. Parents will increasingly be looking for objective standards of quality. This means you should participate in your state's Quality Rating and Improvement Systems and work towards NAFCC accreditation.

2) Seeks out other child care providers for support

You can learn a lot from other successful colleagues. Ask them what they did that helped them succeed financially and what didn't work. Join your local, state and national family child care association.

3) Is intentional about planning ahead and setting goals

It's important to set both short and long terms financial goals for your business and family. When you do this you will be much more likely to meet your goals.

Short-term goals (1-5 years) can be setting up a three-month emergency fund, paying off credit card debt, establishing a car replacement fund and purchasing business liability insurance.

Long-term goals can be saving 10% of your profit towards your retirement, purchasing disability income insurance or long-term care insurance.

4) Evaluates what does and doesn't work and learns from mistakes

Don't be afraid to make mistakes as you try to improve your business. If you haven't failed at something recently, you probably aren't trying hard enough. Conduct annual parent evaluations and look for ways to continually improve your program. Review your progress towards your short and long terms goals each year and make adjustments.

Don't give up on yourself. If you can't make a financial success at child care, don't despair. It may be necessary to move on to another career and seek success elsewhere.

5) Stays up-to-date

Parents are increasingly using the Internet to find child care. Will they be able to find your program? Are you taking advantage of Facebook, Craigslist, Pinterest, Google Alert, child care forums, online classified ads and YouTube? You should consider all of these tools and more in your outreach to prospective parents.

6) Matches their rates with their quality

Unfortunately, parents often do not recognize high quality child care and child care providers often do not do a good job explaining the benefits of their program. This has created a situation where there is not a correlation between high quality care and the cost of care. In other words, the highest quality child care providers are not charging the highest rates. This contributes to the difficulty parents have in finding high quality care since consumers associate higher quality with higher cost.

Are you an "average" child care provider? If not, your rates should not be average. Your rates are probably about right when you occasionally lose a parent who can't afford your services.

Not all child care providers are seeking to maximize their income. Many care for low-income parents and choose not to charge higher rates because they want to help these familiy out.

7) Joins with others to increase public support for working families and child care providers

If where we spend our public money is a sign of what's important to us as a society, then the value we place on young children is extremely low. Compared to the rest of the developed world, the United States is way behind in helping women stay home and care for children and in funding a child care system that supports child care workers fairly.

Most parents could not afford to pay the cost of child care if child care providers were earned a liveable wage. While our society heavily subsidizes higher education through government and private corporations and foundations, the costs of early childhood education are paid primarily by parents.

I recommend that child care providers join with other individuals and organizations that are working to increase public support for child care. This includes unions, and child care support organizations. Become politically active by supporting candidates for public office that will support young children and those who care for them. It's only by increasing public funding that child care workers will get paid what they deserve.

Conclusion

Financial success is a relative term. You will always be making more than some and less than others. But it's not all about money. We should not ignore the important non-financial reasons that also motivate family child care providers.

I appreciate what you do to care for children in the face of tremendous financial challenges.

Image credit: http://www.wbdc.org/

Posted by Tom Copeland at 12:13 PM in Marketing, Money Management & Retirement | Permalink
Tom Copeland, www.tomcopelandblog.com

Legal and Insurance Tips

Three Key Legal and Insurance Tips
By Tom Copeland. Published with permission.
 

Family child care providers can never eliminate the many risks associated with caring for children.

 

Here are three tips you can take to reduce the risks of running their business.

 

One: Take common sense steps to manage your risk

 

* Comply with all state licensing regulations. If you are in compliance with state regulations, particularly those dealing with health and safety issues, you are likely to be less liable if there is an accident.

* Carefully screen, train, and monitor employees. Because you could be held liable for actions of your employees, be sure they are able to protect the health and safety of the children in care.

* Fulfill your responsibilities as a mandated reporter of child abuse and neglect. You need to understand your responsibilities as a mandated reporter and be a resource to parents about child abuse and neglect

 

Two: Establish clear policies to keep children safe

 

* Protect children from parents who pick up or drop off their children under the influence of alcohol or drugs, or fail to provide adequate car restraints. Adopt a policy that urges parents to use other transportation options in these situations. If parents insist on transporting children when the child is in danger, don't hesitate to call the police. See my article on this and a sample transportation policy.

* You cannot discriminate against families because of race, color, sex, religion, disability, or national origin. Disability includes physical handicaps, learning disabilities, HIV, and AIDS. You are responsible for complying with the Americans with Disabilities Act.

* Follow the proper sleeping procedures with infants by putting them on their backs to prevent SIDS.

 

Three: Obtain adequate insurance to protect against major risks

 

* Homeowner's insurance: Many homeowners' insurance policies exclude coverage or severely limit the coverage for a family child care provider. Obtain a written statement from your insurance agent that your home and contents are fully covered for business use. See more.

 

* Car insurance: If you use your car on a regular basis for your business may need to purchase commercial car insurance. Discuss your use of your car with your agent to ensure that you are properly covered. See more.

 

* Business liability insurance: Purchase a business liability insurance policy that covers you against lawsuits and claims against your business. Purchase as much as you can afford: ideally coverage should be $1 million per occurrence and $2-3 million aggregate. See more.

 

A modified version of this article was first produced by Think Small. For additional family child care business publications, contact Think Small's publishing division, Redleaf Press, at 800-423-8309 or visit www.redleafpress.org.

For more information, see Tom Copelland book Family Child Care Legal and Insurance Guide.

Tom Copeland, www.tomcopelandblog.com

lower the taxes in your home

If you bought your home for 4 years or more, your home is now worth less than when you bought it. If you are paying taxes for the house by the purchase price or more, you are paying more taxes than you should. To avoid this you must make an appeal to the County. The County has made ​​an appeal difficult, and there is virtually no time to do it. It is best to entrust a specialized agency to do so. I did it last year and now I save $ 2,200 in taxes  every year. If do not lower your taxers the agency does not charge. Call me at 773-867-7387 with your name and address and the agency can know if it is worth making an appeal to lower your taxes
Angel.

Americans with Disabilities Act

The Americans with Disabilities Act and Family Child Care

By Tom Copeland, puiblished whit permission.

The Americans with Disabilities Act (ADA) is a federal civil rights law that prohibits discrimination against people with disabilities.

All family child care providers, including those who are exempt from their state regulations must comply with the ADA.

A disability is a physical or mental impairment that limits one or more major life activities: hearing seeing, learning, speaking, and walking.

Such disabilities include, but are not limited to cancer, cerebral palsy, deafness, diabetes, emotional or mental illness, epilepsy, HIV and AIDS, learning disabilities, and mental retardation.

Does this mean that you must care for every child who has a disability and wants to enroll in your program?

No.

It means you must make "reasonable accommodations" to include children with disabilities. What is reasonable will depend on the individual assessment of the child’s needs and your ability to accommodate those needs.

You cannot deny care to a child with a disability for these reasons:

* Child has a severe disability

* You don’t feel you have the skills to deliver care

* Your policies say you don’t care for children with disabilities

* You don’t feel comfortable dealing with certain disabilities, such as AIDS

You must care for children with disabilities unless:

*Offering your services to the child would impose an “undue burden” (meaning "significant difficulty or expense")

* The child’s condition poses a “direct threat” to herself or others

Let's look at two situations:

Child in Wheelchair

A child shows up to your program in a wheelchair and you have 6 front steps. You would have to care for this child if you could accommodate her by: lifting her into your home, using a side entrance, or spending $100 on a temporary wooden ramp.

You would not have to care for this child if none of the above solutions would work and the only solution was to build a ramp costing $5,000 ("significant expense").

Child with a Severe Learning Disability

A parent wants to enroll her child in your program and the child has a severe learning disability. Your job is to find out what it would take to accommodate this child and properly care for the other children in your program. Ask the parent, the child's doctor/nurse for help in understanding what this child needs.

If you are able to provide appropriate care after obtaining a little training then you must provide the care. If it's not possible for one person to provide care for everyone, then you need to explore what it would take to bring in another adult to help. If you can find a volunteer, you must provide the care. If the only solution is paying a helper and the helper would cost you $400 a week, this would be considered a "significant expense."

You could then tell the parent that you can't afford to provide care. If the parent volunteers to pay the extra $400 a week, you would have to care for the child. You cannot ask a parent of a child with a disability to pay extra.

Family child care providers have cared for children with disabilities without much difficulty in the vast majority of situations. Having experience in care for children with special needs is a plus as you promote your program to prospective parents.

For additional help in understanding the ADA, talk with your local Child Care Resource & Referral agency or visit http://www.ada.gov/.

Q&A About the Americans with Disabilities Act

The Americans with Disabilities Act (ADA) is a federal civil rights law (passed in 1990) that prohibits discrimination against people with disabilities. All family child care providers, including those who are exempt from state regulations, must comply with the ADA.
Child care providers must make reasonable accommodations to include children with disabilities into their program.
Here are some questions and answers about the ADA:
1) Can I refuse to provide care to a child with epilepsy if I don't believe I am capable of providing adequate care for this child?
Read answer
2) Do I have to build a permanent ramp to my front door so a child in a wheelchair can enroll in my program?
Read answer
3) A parent with an autistic child wants to enroll her child in my program. I can't possibly provide one-on-one care for this child and care for the other children in my program. What should I tell her?
Read answer
The Disabled Access Credit is available for making your home more accessible to children with disabilities.  The credit can be used to help offset the cost of items such as grab bars, bathroom remodel, or wider doorways. Fill out Form 8826 Disabled Access Credit, then Form 3800 General Business Credit and claim the credit on Form 1040, line 53. You can also claim a disabled access deduction of up to $15,000 for certain expenses on Schedule C, line 27, instead of depreciating them. Examples of such expenses include: converting a van, remodeling, or building a ramp.
Image credit: ndspro.com
For more information about the ADA, see my book Family Child Care Legal and Insurance Guide.

Tom Copeland, www.tomcopelandblog.com