Cash payments how should i handle this

[DORITOSGIRL]

Hi
I have two full time kids and a part time kid ( 3 full days a week) starting Next Tuesday.

All parents pay me in cash every Friday.

Should I be depositing the money and then withdraw it to show a record of payment?

I use the money now for our groceries/gas/spending and any gifts we might need.

I will be handing our reciepts. Are the reciepts enough for the government to prove earned xxxx of dollars in 2012.

I am so worried I will get audited.
I also keep grocery reciepts and any other reciept that could be daycare related.

This is the first time I am claiming income as self employed and I want to ensure I am doing it correctly

[treeholm]

It really doesn't matter what you do with the cash as long as you are keeping track of it. If you use a software program for your finances (I've used Quicken for years), you can set up a separate account in your program. Record all income and expenses in it, and you can print out a register report or income statement anytime you like. It's very easy, and you really don't need the Quickbooks version or anything, just the personal finance package. You can also set up a spreadsheet in Excel. Also very easy. The government won't care where the cash went as long as you are declaring it.

[Wonderwiper]

Hi! Don't worry about banking the cash....as long as you record all your income and claim it at tax time. Any accounting software, excel or even just a handwritten list of all payments is fine!

[playfelt]

I do a receipt with each payment and on the reciept write if it was cash or a cheque. I use a book that has duplicates so that is my record of how and when I was paid. The parent gets their copy that they can file to show they paid. I still give an annual receipt in January for tax time with all of my information on it. It doesn't cost that much to give receipts - a book has 50 so that is basically one book per child per year and they are under $5 a book - even the dollar store has some usually. Then if you were audited you have your books that show how and when you were paid and shows how you arrived at the amount you claimed on taxes.

[Momof4]

My families pay in cash too. I bought receipt books at the dollar store for each family and whenever I receive a payment it's recorded in duplicate in the receipt book. At the end of the year I tear out all the duplicates and give them to the parents all at once with a sheet I've typed itemizing all dates and amounts and a total for the year. That way the parents aren't losing the receipts all year long and I don't have to write new ones. And I have exactly the duplicates of everything I have provided to my clients.

My main problem is the fear of having $1000 in my purse on a Friday as I'm making my way to the bank!

[Crayola kiddies]

I do it manually ... I have a duo tang with sheets for recordi g the payments. One sheet per family I record the date the payment was received, the amount, the method (cash or EMT), and the weeks it covers. I provide one receipt in feb for the prior year.

[DORITOSGIRL]

I use excel to keep track of payments.. A spreadsheet with the childs name, date money was recieved and amount.
I will give annual reciept in Dec/January.. for each child with total amount paid to me.
It sounds like I can keep doing what I am doing.. I thought of banking it but then we just end up using the debit card to pay for groceries, gas etc. It seems silly to drive to the bank just to deposit just to withdraw it at the grocery store a hour later.

Thanks for all the info.