Tax Receipt

[love my life]

Hi everyone,
I have a daycare parent that have been with me for almost two years and that I never had issues with. They told me when we met that they don't need tax receipts, but now all of sudden ( it is almost the end of the year), she asked me for a receipt out of the blue moon and the funny thing she wants it for this year. She's been acting weird lately too ( the last month or so) and think she is also pregnant. What would you all do? Thanks in advance!

[mimi]

Did you lower your daily rate is lieu of giving a tax receipt? If she asks for a receipt you have to give it to her.
To protect myself and my business I issue all my clients receipts. What if the relationship goes bad, they might report you to the CRA? What if you were to get audited and your attendance does not match your reported income? Not worth the risk.

[cfred]

Do you just issue a year end receipt for tax purposes? Just do a receipt for them based on what you're claiming for your own taxes. I hope you've been claiming....very dangerous waters to be swimming in if not. I would never run a business without tax receipts.

[love my life]

Thanks for your input. I always give everyone a receipt in February. This particular parent though said that they don't want a receipt but to charge them $3.00 less each day. So I am just shocked that she's asking for one now ( when i was charging her less than everyone) and it hurts my feelings that we've always had a great relationship and now for some reason I think she might be pulling her kid from daycare and doesn't care to follow what we agreed on. Of course, I am going to give her one as we're required to do so, but seems unfair that she made me charge her less and now wants one....

[5 Little Monkeys]

Take it as a lesson learned. I don't say this to be mean but she didn't MAKE you charge her less, you CHOSE to do so for whatever reason. Make sure you don't do this again and you won't have to worry about getting in trouble if your audited or a parent rats you out.

If you feel comfortable, ask her if she is planning on leaving or ask why she wants a receipt now. I would also charge her the full amount starting now if she is going to want receipts every year(which is her right).

(side note....why would a parent not want a receipt? Is there some reason why they wouldn't want to claim their daycare?)

[jazmic]

I wonder if it would be possible to invoice her for the difference that she owes now that she wants a receipt. I mean, you had a deal, right? So maybe tell her "We had agreed that you'd pay less instead of getting a receipt, but since you do want a receipt after all, then you need to pay the full amount." Or something like that. What do people think? :confused:

[mimi]

I think the parent is holding all the cards. If lovemylife would now issue her an invoice for the difference that just confirms she was working under the table. Best to just issue receipt, ask parent what her future daycare requirements are and leave it at that. I might even issue one for the previous year's care as well just to relieve myself of any wrong doing.

[Crayola kiddies]

in my contract it states that tax receipts are issued in February for the prior year or at the end of fully paid terminated care. so if she is still with you and she hasn't given notice then I would let her know that you will issue a receipt in February with the rest of your clients. if she causes a stink then you will know that something is up. I would then so as a prior poster said and tell her your deal was that she got a reduced rate in lieu of a receipt ..now that she wants a receipt her fees go up and that she owes you a bit of money. does she pay cash or cheque or emt?

[love my life]

Thank you for all the replies. When we first met she said that it helps them more and rather pay less than get a receipt, so we both agreed on that. It's going to be very hard for me to ask for the difference, but I am going to give it a try and see what she thinks. Either way, I will be giving her a receipt! It's so upsetting to think you have an amazing relationship with a person and then you realize that they don't necessarily care about you the same way you do. Also, I learned not to lower my prices no matter what the reason is as it only brings stress and headache.

[playfelt]

The parent did get the best deal in the sense that just because you don't issue them a receipt if they have their cancelled cheques or some other proof that they paid you the lower fee they are probably claiming the amount on their taxes anyways.

It is also possible that they are being audited and need an official receipt to prove their expenses.

Not sure you will get anywhere asking for the back pay and may have to just go without that but moving forward from the date you give the receipt the parent will be expected to pay the same rate as the other families. I would give them a new contract to sign with the new rate and chances are that will get the truth out of them. Don't be surprised if they are planning to leave care and just getting all of their things in place first.

[mickyc]

I suggest you give them notice that their rate is increasing effective immediately. If she asks you why then say it is because they now require receipts and you had an agreement to not provide them previously at a reduced rate.

[treeholm]

Whether or not she wanted a receipt, you are still obligated to declare the income. If you ask for the difference now, it is tantamount to admitting that you were working under the table. If a parent told me they didn't need a receipt, I would say they are welcome to shred it, if they like, but by law, I am obligated to provide it. It just boggles my mind that a parent would tell you, basically, to cheat the government so they can pay a lower rate. If I knew from the beginning that a parent wanted me to do something unethical, I could never trust that parent. That would have been a huge red flag for me.

[Crayola kiddies]

I agree you probably aren't going to get any of the money but I would raise her rate effective in two weeks(because that's what my contract says I must give for changes) and make her new rate $3 higher then what everyone else pays. If she stays that's how il you will recoup some of your lost wages.

[Paulo Gomes]

Yeah I think its totally absurd. Anyway as she is your one of old client I mean two year old so you can actually give them a invoice template (https://zipbooks.com/invoice-templates/) and get rid of her.

[Suzie_Homemaker]

Legally, she entitled to a receipt. I would remind her that her new rate will be but not try and back charge her. I presume you declared the income anyway.

[Van]

yes, you have to give her the receipt and give her the new rate that goes with the receipts

[Suzie_Homemaker]

Thank you for all the replies. When we first met she said that it helps them more and rather pay less than get a receipt, so we both agreed on that. It's going to be very hard for me to ask for the difference, but I am going to give it a try and see what she thinks. Either way, I will be giving her a receipt! It's so upsetting to think you have an amazing relationship with a person and then you realize that they don't necessarily care about you the same way you do. Also, I learned not to lower my prices no matter what the reason is as it only brings stress and headache.

I don't think that the issue - that they don't care. Most parent not realized they can claim up to $8,000 of child care cost as tax credit. It's NEVER to their benefit not to have that unless of course they too are working under the counter, and trying to hide expenses because they hid income. Regardless, home day care is the most audited self employed business in Canada so even if you have this situation, declare the income, tell the client you will be issuing a receipt, and then if they pay you cash and opt to use it, that on them. As long as you operate above board, that all you are accountable for.

[Van]

Just looked at the date of the original post, it was back in 2013

[Fearlessbaby]

Hey, I have a parent who was asking 4 times for my SIN # in March. I told her that I don't give it out. I've given out many receipts without it and it's always fine. I have a feeling she's a scam artist. I just got another email saying that the receipt isn't valid because there's no SIN. Argh! I am not giving this women my SIN- I don't trust her and she can steal my identity. Can't the CRA just find my SIN if they have my address and name?

[Suzie_Homemaker]

Hey, I have a parent who was asking 4 times for my SIN # in March. I told her that I don't give it out. I've given out many receipts without it and it's always fine. I have a feeling she's a scam artist. I just got another email saying that the receipt isn't valid because there's no SIN. Argh! I am not giving this women my SIN- I don't trust her and she can steal my identity. Can't the CRA just find my SIN if they have my address and name?

She isn't a scan artist. The CRA guidelines for running a day care from your home, tell you that a receipt must have SIN # to be valid. All of the software for parent tax return requires the SIN #. Although many don't like giving it out and miss it off their receipts, once a parent asks for it, you must provide it.
Home day care is one of the few businesses where you do not have to register your business and have a business name provincially. Due to this, you SIN # is how they track your income and it's the only thing that makes your receipt valid if a parent is being audited. You can voluntarily register your business and get a BIN # (business number) instead if you don't wish to give out your SIN but you must give parents one or the other if they request it. The cost of registering your business and getting a BIN is different in each province. Some really expensive and require frequent re-registration, other provinces not so expensive and last longer period of time before re-registration (and payment) needed.
Seriously - the bigger issue is you don't trust your client. If she is trusting you with the care of her child, then you have to trust her with your SIN or BIN - that's a requirement of running a home day care in this country. With all due respect, knowing what we earn, if she was going to steal someone's identity, it's unlikely to be ours.
While I'm sure the CRA can find your SIN can you imagine the fall out if they started doing that. This is clearly outlined as your responsibility to provide.

http://www.cra-arc.gc.ca/E/pub/tg/p134/p134-16e.pdf

[sandylynn]

I agree you probably aren't going to get any of the money but I would raise her rate effective in two weeks(because that's what my contract says I must give for changes) and make her new rate $3 higher then what everyone else pays. If she stays that's how il you will recoup some of your lost wages.That is exactly what I was thinking. Put her new rate $3.00 a day higher than everyone else...if she questions it, say that you had increased your rate months ago...and that is what everyone pays. I had the exact same thing happen to me when I first started this business many years ago. I had made a the same deal with a parent and then she called me and told me she had claimed the income behind my back and that she was being audited. I ended our telephone conversation very politely and told her I would give her a receipt. I wrote the receipt out and waited for her the next morning. When she showed up...(yes...she had the audacity to actually come to my home )....I told her to "get the hell off my property, she couldn't be trusted and that I don't have people in my home that I can't trust or who are back stabbers....I went back and claimed the money on my taxes....

yes...I made a mistake ..should not have made that sort of deal with anyone and have not and would not do it again. Lesson learned....P.S. SHE CLAIMED MORE THAN SHE PAID ME AT THAT!!!!!!!!