Income tax

[Goldilocks]

This year I have to pay a lot back for income tax. What do you do to keep that amount low? Do you buy a lot for daycare expenses? What kinds of things should I buying more of? I usually buy second hand toys for cheap. More arts and crafts? Buy RRSPs? I’ve claimed almost everything I can think of.

[bright sparks]

Things to claim...

Actual cost of food for daycare...100%

Paper goods like stationary and arts and crafts supplies

Cleaning products used exclusively for daycare

Do you have a cleaner? If so, get receipts from them or keep track and write your own.

Cost of utilities for hours operated for square footage used i.e. water, hydro, gas

Property tax based on hours of operation and square footage used

Mortgage interest based on square footage used

Insurance...100% of childcare related

Auto insurance...100. Of childcare related plus percentage used for childcare related expenses when not carrying children. Such as groceries banking and other daycare related errands

Fuel...100% used for daycare mileage both carrying children and when not carrying children but daycare related errands

Phone bill...based on hours of operation and percentage daycare use

Cable....based on hours of operation and percentage daycare use

Internet bill ....based on hours of operation and percentage daycare use

Advertising

Costco membership...based on percentage used

Other daycare related memberships...based on percentage used

Write out receipts for used toys and claim the cost

Wear and tear...so any daycare space requiring repair, repainting etc

Car seats, playpens, High chairs, other equipment.

Hours outside of daycare operating hours used for daycare related work...keep track of time spent grocery shopping, cleaning, running daycare errands, admin work, interviews and contract signing and meal prep. These are all work related and that time is something you can assign a cost to and claim.

Accountant fees

Christmas party or special events. Children's gifts

[Busy ECE mommy]

Yes, all the ones bright sparks mentioned.
Interesting though, I have used 3 different accountants over the last 11 years, and not one has ever said I could use even a portion of the cable bill. They all said that was a personal family expense.
I also claim ice melter/ mulch around the climber/ sand for sandbox etc. Also hired a painter to paint daycare room.
Office equipment and supplies like a laptop for the daycare/ shredder/ printer/ printer ink etc.
Capital cost allowance are depreciated items like expensive stroller/ replacing broken appliances
Remember that the % use of home calculation for maintenance can include any repair expenses you had on the whole house( repair roof/ repair driveway/ plumbing/ paint/ broken fence or gate/ appliance repair.
It’s amazing to see how many $ we put into repairs on the whole house( obviously we only write off a portion of those)
Any gifts you give the kids or parents as well
Any anti virus software on the daycare only computer or the fee for a master business license( Ontario) or your website domain name annual renewal fee all count.

[Busy ECE mommy]

Also, any professional development courses or cpr renewals or police check fees etc or any professional associations you belong to related to business( college of ECE renewal/ AECEO/ any memberships with a teacher resource centre( where you borrow toys or go to seminars or laminate or use die press machines etc)
I own my car not lease so there is depreciation on the car as well to claim and any car repairs or oil changes etc

[Goldilocks]

Thank you for everyone’s advice. I have claimed everything everyone mentioned. I was just wondering what I missed. I’m disappointed that I have so much to pay back. I had a huge profit but it sure doesn’t seem like it. I’ll just have to be more aware of my expenses and start buying more at year end this year.

[Busy ECE mommy]

We pay both ends of the CPP, so that can make a big impact on what we owe.
Also consider the total family expenses like private health benefits for the family and medical expenses that weren’t covered by insurance.
Also kids summer camp or before and after school care all counts as daycare expenses.

[Goldilocks]

How did you figure out the cost for hours outside of daycare hours? Do you use a certain formula to figure it out?

[Busy ECE mommy]

@ goldilocks, my accountant told me to make an average guess at extra hours worked per week, and add those hours onto your daily hours of operations for the business use of home calculation ie. I’m open 9.5 hours a day but claim 11 hours a day to account for extra time spent on the business after hours.
I’m sure it actually is higher than that per week, but I didn’t want alarm bells going off with CRA.

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[susansmith]

"write out a receipt for used toys" and claim it...hmmm....we can make our own receipts. Over all the years I have bough and paid cash for toys etc at garage sales, I've NEVER CLAIMED THE AMOUNT. I was always under the impression that the person you bought the goods from had to give the receipt and in a garage sale case....they are not going to! Anyon else???

[susansmith]

Can anyone answer this?