Top Tips for Navigating Tax Season Without the Stress

A Simple Guide for Adult Family Home (AFH) Owners

For many Adult Family Home (AFH) owners, tax season can feel overwhelming — from gathering receipts and payroll records to figuring out which expenses are deductible. Add in tight deadlines and changing IRS rules, and it’s easy to see why most AFH owners dread this time of year.

But with the right plan in place, tax season doesn’t have to be stressful. By staying organized and starting early, you can save time, reduce anxiety, and even uncover deductions that keep more money in your pocket.

Let’s walk through a few practical steps to make this tax season easier for your AFH business.

1️⃣ Start Early for a Smoother Tax Season

One of the simplest ways to reduce stress is to start early. Waiting until March or April leaves little time to fix missing records or address questions. Starting early gives you room to plan and stay in control.

What to Do Now:

• Gather Your Documents: Collect bank statements, resident income logs, Medicaid payment summaries, payroll reports, and receipts for business expenses (food, supplies, licensing fees, etc.).

• Review Last Year’s Return: See what your preparer used last year to ensure nothing is missed this year.

• Set Up a System: Create a clean, dedicated folder (digital or physical) labeled for 2025 taxes.

💡 Pro Tip: Schedule 30 minutes each week to review your AFH finances — that one habit alone can save you hours at tax time.

2️⃣ Use Technology to Stay Organized

Technology can make your life much easier as an AFH owner. Between resident care and staffing, the last thing you need is paperwork chaos.

Tools That Help:

• Bookkeeping Software (QuickBooks or Drake Accounting): Track income and expenses by category.

• Mileage Tracking Apps: Automatically record trips for business, errands, or resident appointments.

• Secure Portals (like Drake Documents): Upload your paperwork directly to your tax preparer without worrying about lost files.

💡 Most AFH owners who use digital tools end up cutting their prep time in half — and avoid the panic of misplaced receipts.

3️⃣ Keep Records Organized All Year

The key to a calm tax season is year-round organization. Good recordkeeping ensures you don’t miss deductions and protects you in case of an audit.

How to Stay Organized:

• Use one business-only checking account for all AFH income and expenses.

• Record your expenses monthly (not once a year).

• Keep copies of invoices, receipts, and payroll reports in one secure location.

According to the IRS, small business owners who maintain monthly bookkeeping save up to 25% on tax prep fees — because clean books mean fewer surprises.

4️⃣ Know Which Deductions Apply to Your AFH

Many AFH owners miss valuable deductions simply because they don’t know what qualifies.

Here are a few common deductions AFH owners can claim:

• Resident meals and groceries

• Household supplies for resident care

• Mileage for errands, trainings, and medical appointments

• Payroll and caregiver wages

• Utilities, repairs, and maintenance (if you own the home)

• Continuing education and professional training

• Home depreciation if you own and operate the AFH in your residence

💡 Pro Tip: Don’t rely on generic tax software to identify AFH-specific deductions — work with someone who understands your business model.

5️⃣ Seek Professional Help When Needed

Even the most organized AFH owner benefits from expert guidance. A qualified tax professional can help:

• Separate taxable vs. nontaxable Medicaid waiver income (IRS Notice 2014-7)

• Review your business structure for tax savings (sole proprietor vs. LLC or S-Corp)

• Ensure accurate depreciation on your AFH home and equipment

• File timely extensions and avoid penalties

Remember: Hiring a professional isn’t an expense — it’s an investment that often pays for itself in tax savings and peace of mind.

6️⃣ Plan Ahead for Next Year

Once you’ve filed your return, don’t close the books and forget about taxes until next April. The best AFH owners keep tax planning on their calendar year-round.

Plan Ahead by:

• Reviewing your quarterly estimated taxes

• Adjusting your withholdings or business structure if your income changes

• Saving for retirement contributions to reduce future taxes

• Meeting with your tax advisor mid-year for a financial checkup

A 15-minute mid-year review can often save hundreds (sometimes thousands) by correcting issues early.

Final Thoughts

Tax season doesn’t have to bring stress and sleepless nights. By starting early, staying organized, and working with an AFH tax expert, you can turn tax time into an opportunity — not an obstacle.

The key is simple: plan ahead and get professional help before deadlines hit.

Need Help Getting Ready for Tax Season?

I specialize in helping Adult Family Home owners in Washington and Oregon organize, file, and plan for tax season — so you can focus on caring for your residents, not crunching numbers.

📱 Call Christina at 564.888.1687

📧 Email: christina@acuitytaxgroup.com

Let’s make this your most stress-free tax season yet.