PDA

View Full Version : Can anyone tell me how the income tax thing works for daycare.



Julie
12-09-2011, 10:48 AM
I keep all my receipts for groceries and gas i mark things on the receipts that are for the daycare by putting a check mark beside it. Am i wasting my time doing this or is it good that im trying to tell the gov what i actually buy for the daycare.

And what else do i need to send in to them???

Thanks so much.

playfelt
12-09-2011, 11:01 AM
Go to the revenue canada site and there is a brochure for daycare providers that outlines what you can and can not claim. Yes you need to know exactly what you spend on the daycare as only those amounts can be deducted from your income and you need to keep them for 7 years in case they audit you and want proof that you bought what you are claiming you did.

mom-in-alberta
12-09-2011, 06:22 PM
Yes, that is the best place to start.
Try this link:

http://www.cra-arc.gc.ca/tx/bsnss/tpcs/dycr/menu-eng.html

bright sparks
05-29-2012, 10:58 PM
What area are you in Julie?? I have a terrific accountant who specializes in home daycare tax returns and they charge a really reasonable rate. Saves time and also has all the facts without the need to read all the jargon which is both time consuming and quite often is made out to be way more complicated than necessairy IMO. For example if you spend a certain amount on food for your daycare children, it doesn't automatically mean you can write it all off. The maximum guideline per child per day for 2 snacks and 1 meal is $10. This doesnt mean you can't claim for more but make sure its completely legitimate as you are at a much higher risk of being auditted. The same with km, gas, general maintenance of your car. There is a maximum amount per km that you can claim for this. Let me know where you are and if its feaseable I will forward the accountants info on to you.

Inspired by Reggio
05-30-2012, 06:25 AM
....The maximum guideline per child per day for 2 snacks and 1 meal is $10.....The same with km, gas, general maintenance of your car. There is a maximum amount per km that you can claim for this. Let me know where you are and if its feasible I will forward the accountants info on to you.

Hmmm - I have read just about every article put out my Revenue Canada for using your business for home childcare and have never come across a 'cap' on how much you can claim for food or vehicle expenses .... it just says you can write off any 'reasonable expense incurred through operation of your business'?

While I agree that being too aggressive with write offs can get you red flagged for an audit - if you are truly spending $15 a day per child on food for example - write it ALL OFF and keep your documentation for proof why should you suck up the cost of that and pay taxes on something you should not have to? My understanding is that the only thing with caps are your capital cost allowances for major purchases and there are tables for figuring that out provided?

So with food you have to have the receipts and documentation to back up your expenses as 'reasonable' you cannot just say I spent $8 a day per child ... cause if you are claiming that much in groceries you better have receipts that show you spent $200 a week on groceries PLUS receipts for your own family in addition to that to show them you fed your own family separate from that.

Plus my understanding is that your vehicle expenses are determined by adding up all the cost of your vehicle that year from the gas used, insurance, repairs and maintenance, registration and renewal of your plates and so forth and than determining that your business use was over your personal use by logging your trips for business to track your KM .... so one year if I had 'no' maintenance on my vehicle my write off might only be small but the next year if I had to do $8000 in repairs on it my write off would be that much higher?

Also my advice of the day - while accountants are helpful you still need to know the rules yourself cause if your accoutant graduated at the BOTTOM of their class in school that means there is 40% of the information out there they did not retain - and if if pertains to your business you can find yourself audited and it is YOU who has to pay the back taxes and so forth not the accountant ;)

For example I have peers whose accountants tell them they can write off 50% and up of their shared expenses of their home .... however if you use the CRA's equation for our industry to determine your shared expenses that would mean that you are using 100% of your square footage of your home for business, it would mean you are open at least 12 hours a day and that you are working 365 days a year ... because that is how our equation works and the only way you can get as high as 50% .... if you are writing off MORE than 50% that would mean you are working more than 12 hours a day everyday and so forth?

However most accountants are use to figuring out 'dedicated to business space' .... like a hairdressor or home spa or mechanic with a home garage where the space is NEVER used for personal family use and they just use the square footage of the house over square footage used and stop there - which is not correct for us and if audited you are going to be owning a lot of back tax cause shared expenses add up ... that is your mortgage interest, property tax, gas, hydro, sewage and so forth which is a large chunk of our write offs!

For shared space equations for home childcare it is

(the square footage used for business divided by the square footage of your total home) x (number of hours open for business divided by 24 hours in a day) x ( number of days business is run / 365) = % of business use

bright sparks
06-11-2012, 08:42 AM
@Reggio

I agree with claiming for exactly what you pay out on food, which is what I do. I didn't and wouldn't tell people to suck up the extra cost above $10 per day. However the 'reasonable amount' that is said is $10 per day. That being said, please read that I put $10 per day for 1 meal and 2 snacks. A lot of providers do breakfast and additional snacks, maybe even a light dinner if a child is doing long hours so this warrants a higher write off because of course you are spending a lot more on food and if you keep all the reciepts then theres no problem. I feed my daycare children organic and naturally raised/produced foods and make everything from scratch, no exceptions and $10 covers it for 1 meal and 2 snacks. Also bear in mind that if you get auditted you can show as many reciepts as you like but it all depends on who is auditing you. They can say its not a reasonable amount to be spending per day on food when your reciepts are full of say tinned or frozen veg instead of fresh veg for example and they could quite easily ask you to prove that none of this food was used to feed your own family. Yes we can shop seperatly and show different reciepts but ultimatly if you get an awkward auditor they may not take your word for it and not allow you to write it all off. This is why I make sure I dont spend more than the $10 per day per child so as not to attract attention and get audited. Who has time to be auditted if we can take preventative measures in advance. IMO I prefer to play it safe. If I could justify it and it was something I was unable to keep down, then I would claim the larger amount. So far I have been lucky. I am pretty sure the caps are just for capital items over a $200 purchase price the rest are just guidelines to prevent a red flag as you said.

I am very fortunate to have a great accountant. I used to do my own taxes but found this accountant through my daycare association and have since been very happy with him. He follows guidelines to a T and specializes in home daycares. The company has been filing taxes for the Burlington sector of Halton Childcare providers association for well over 10 years and there are over 80 members and we are very active members and I have never heard of any problems. I know personally a few providers who have been auditted due to higher than average expenses and it turned out that everything was in order with their paperwork.

Thanks for your feedback on the subject. Always great to hear others opinions and learn new things :)

playfelt
06-11-2012, 10:16 AM
No matter what your grocery receipts are full of cans or bottle or boxes or bags of produce it shows what you paid to feed daycare and your own family which presumable is pretty similar as in no one is going to go to all the trouble of organic foods and meals from scratch for daycare and then zap a microwave dinner for the family. Revenue Canada will take all of your receipts the number of people in your family and the number of daycare kids and meals served and determine what percent of the bill applies to each. $10 might not seem like a lot of money but times 5 kids that is $50 a day or $250 a week or about $1000 a month. I'm sure even using mostly organic that most can manage to feed within that limit.

bright sparks
06-11-2012, 01:30 PM
I find that a budget of $1000 per month covers my daycare food easily so the $10 a day amount works great for me.

sandylynn
01-07-2015, 12:17 PM
$50.00 a DAY! What are you feeding these children? Can I come to your house for snack and lunch! I would think that would definitely invite an audit! Just curious....has ANYONE here been through an audit?

bright sparks
01-08-2015, 07:54 AM
$50.00 a DAY! What are you feeding these children? Can I come to your house for snack and lunch! I would think that would definitely invite an audit! Just curious....has ANYONE here been through an audit?

Bear in mind this thread is really old and I have since reduced my costs by making changes, not because of auditing but because my area became very competitive and I needed to reduce my costs when I had spots open with zero enquiries.

$50 may seem like a lot, in fact it is a lot but I was serving a 100% organic meal plan along with nothing processed, everything made from scratch, everything fresh from meat to veggies and also offered a gluten free menu so organic gluten free grains. My accountant has told me that up to $10 per child per day for food is considered a fair amount to claim without the worry of being audited. When I lived in Burlington, the place was saturated with providers so to give myself a neesh, I offered an organic plan and accommodated allergies which drew families who cared about nutrition in and created a wait list. I was able to charge more per day due to the income level of my area. When I moved to Niagara Region the meal plan still drew lots of families in although my rate did go down a little as the poverty rate is higher here and income levels are generally a bit lower or people have higher travel costs at the very least, so my expense obviously increased. I also haven't had a rate increase for a good few years and so again, the expense of food falls on me. This year I have calculated my food and while I started out higher at the beginning of the year it has averaged out to $8 per child per day and I work 4 days a week now, not 5. I no longer offer a full organic plan to counter the lack of fee increase in light of the fact that inflation in food costs occurs annually regardless. I do not buy organic meat but abf instead which saves me a little, not a lot, and we are meat free 50% of the time which saves me the most. I serve less fruit and more raw veggies, again saves a decent amount monthly when my crew have healthy appetites. I have always had great eaters, only a couple out of the 30+ have eaten like mice. I spend about $150 a week on average now for 4 kids for 4 days. It's a real struggle too I find to feed them healthy but just takes more planning and certain things like lasagne that are expensive to make just never go on my menu. I price match like a crazy person too and when something is on sale I buy multiple and stock pile it. pc plus is also amazing as its tailored to your buying habits so I regularly get items for a steal from the natural food department which makes a big difference. In 2014 I signed up and since August I have redeemed over $400!!

sandylynn
01-08-2015, 09:19 AM
Again....has anyone out there....ever been AUDITED

5 Little Monkeys
01-08-2015, 09:28 AM
Again....has anyone out there....ever been AUDITED

Nope, not with my dc anyways.

Rachael
01-08-2015, 09:45 AM
Again....has anyone out there....ever been AUDITED

Yep. I have. When my marital status changed, there was a mixup on their end, not mine but it resulted in a whack of paperwork coming from my lawyer who deal with my husband's passing to CRA. I'm not sure if they took exception it this or if once a certain level of back and forth happens, then they start digging but I ended up being audited that year.

It's not a big deal as long as your paper work is in order but it's a pain in the butt because its a lot of paperwork.

Rachael
01-08-2015, 10:03 AM
Hmmm - I have read just about every article put out my Revenue Canada for using your business for home childcare and have never come across a 'cap' on how much you can claim for food or vehicle expenses .... it just says you can write off any 'reasonable expense incurred through operation of your business'?

Agreed - but CRA know what is reasonable for day care's in your area and therefore their definition of reasonable might vary from ours. I know when I've spoken to accountants who specialize in day care provider's returns, they have said that using a $ amount per head is a good way of making sure that the "reasonable" for both parties was somewhat in line. But they were clear - it wasn't a case of x amount times x children = claim, it was more so x amount time x children = reasonable and as long as receipts supported that much had been spent, then it was a safe amount that didn't raise red flags.

Interesting to see that $10 is being suggested as a reasonable amount (with receipts to prove cost) as here $3.50 is the accepted reasonable amount to use as a guide. I tend to average about $7.00 and have been submitting receipts for the entire expense but have been fulling expecting an audit as the result of it.



Plus my understanding is that your vehicle expenses are determined by adding up all the cost of your vehicle that year from the gas used, insurance, repairs and maintenance, registration and renewal of your plates and so forth and than determining that your business use was over your personal use by logging your trips for business to track your KM .... so one year if I had 'no' maintenance on my vehicle my write off might only be small but the next year if I had to do $8000 in repairs on it my write off would be that much higher?

Agreed and this is how I do it too. This year, I had a $1,500 brake job so maintenance will be higher. Last year, I had replacement Winter Tires.



For example I have peers whose accountants tell them they can write off 50% and up of their shared expenses of their home .... however if you use the CRA's equation for our industry to determine your shared expenses that would mean that you are using 100% of your square footage of your home for business, it would mean you are open at least 12 hours a day and that you are working 365 days a year ... because that is how our equation works and the only way you can get as high as 50% .... if you are writing off MORE than 50% that would mean you are working more than 12 hours a day everyday and so forth?

Again agreed BUT some people here have two levels to their homes - the main level and a basement. It's common here that the entire basement is used solely for day care. Separate entrances exist, small kitchen area, bathroom, bedroom for cribs and then the general day care area.

In these instances, where it is wholly a day care space and not used by the family, then it really is 50% of the allowable expenses because it's 50% of the square footage and the 12 hours a day or 5 days out of 7 don't apply.

If someone was really using 100% of their house for day care and outside of business hours it was all used by the family (i.e. no dedicated day care rooms), then 100% of sq footage with the 12 hours a day and 5 days out of 7 calculates as being 35% business use (due to the 24 hours on Sat and Sun being family use).

Even then, it's unlikely 100% of the house is really used, unless carer's are shoving kiddies in their on-suites, using every single bedroom and closet.

For most it will be 35% or less of their allowable expenses. The very max it will be depends wholly on dedicated day care space.

sandylynn
01-09-2015, 07:59 AM
I have a playpen for napping in 3 of the bedrooms....if my son is tripping over a playpen to get to his closet...then I feel justified in using this room as a write-off (even though it's only for 2 hours that the child is napping in the playpen)...the playpen is in his room 24 hrs. a day! Thoughts?

sandylynn
01-09-2015, 08:01 AM
ps....I use $3.50 a day per child for 2 snacks and 2 meals....I don't save receipts....for groceries....when I spoke to rev. Canada...the woman said use a set amount (reasonable) for each child....at 3.50 per child....I really think I am being unfair to myself but don't want to invite an audit....at the whole basement.....kitchen ....bathroom....and 3 bedrooms...I use 40% of my home as a write off

5 Little Monkeys
01-09-2015, 08:04 AM
Sandy...I don think it works like that but maybe? In that case, my whole house, yard, shed and garage are used lol...dc stuff is everywhere!

I would start saving receipts and claiming more! Mine works out to about $5/child/day which I think is very fair but I have receipts as well.

sandylynn
01-09-2015, 08:09 AM
Thanks 5 little monkeys....I will start saving receipts....so how does one justify which room in their home can be used .....

5 Little Monkeys
01-09-2015, 08:26 AM
For myself, I use my basement for dc only with a bit of time in my laundry room on weekends. I claim 50% because it's exactly half. I do use my upstairs living room in the beginning and end of day so I asked my accountant about that and she said anything over 50% would start to look suspicious and I'd have to use the formula to figure out the %. It would actually be less than half then. So I stick with the 50%....the time we spend upstairs sorta cancels out my use in the laundry room on weekends too!

When using the formula it's (I think I remember right)....(hours open/hours in day) X (days open/days in week) X (rooms used for dc/total rooms in house). So mine would be (9/24) x (5/7) X (5/10)

My accountant said for a room to count, it has to be either dc only or spending a good chunk of time in it. I'm not sure if naptime counts...it might!! I would think folding the playpen when not in use might be a better option...even tho it's annoying!! Lol

Rachael
01-09-2015, 11:11 AM
Thanks 5 little monkeys....I will start saving receipts....so how does one justify which room in their home can be used .....

I think if you are using your bedrooms then you would include them but as you said you don't use them for the full day care day, just two hours and so the calculations would be different. The formula and examples are on the CRA site.

With regards to claiming groceries based on $3.50 but not having receipts - you have to have the receipts.

When I was audited. I had one entry on my spreadsheet which was for $3.00 at the Dollarstore for crafts and I'd lost the receipt. They didn't allow that $3.00 in the audit. No receipt, no claim is their rules. I lucked in as I had missed $4.34 off the business costs elsewhere so they let it go as the net effect was the same-ish

sandylynn
01-09-2015, 12:17 PM
Thanks Rachel....question.. ..when you were audited....was it just for the one year or did they go back to other years?

mickyc
01-09-2015, 12:55 PM
sandylynn- do you use an accountant? If not I suggest you get one. You are likely missing out on a lot of things you could claim and you could have a disaster on your hands for not having receipts.

I also use my basement space as 100% daycare. This past year we did a full reno on the basement so my daycare was in my upstairs space for quite a few months. Technically daycare consumed majority of my house during this time. The most I can claim for though is 50%. I can though claim all of my reno costs so hopefully have lots to transfer over to next year. My accountant suggested doing all my groceries together and just claiming 50%. It works out to approx. $5 per child per day. It works out better for me anyways. I keep all receipts for everything!! I also track km's I use and claim a portion of my gas every year as well - here too I save all gas receipts throughout the year.

sandylynn
01-09-2015, 01:19 PM
Hi Mickyc....I keep receipts for any other incidentals I claim....the only receipts I wasn't keeping was groceries....keeping it at 3.50 per child...I don't believe will ask for an audit...and I keep the 40% for space used in the home. I DON'T USE MY CAR....so I am not sure what else I am missing out on....I have had H&R do my taxes for the past 5 years.....

sandylynn
01-09-2015, 01:20 PM
I will keep grocery receipts from here on in...but obviously can't do anything about it for the past years...that was why I was asking when someone is audited....is it just for the past year or do they go back ...

Rachael
01-09-2015, 04:29 PM
Thanks Rachel....question.. ..when you were audited....was it just for the one year or did they go back to other years?

For me it was one year but that's only because there were no issues. They were really clear that had my records not been in order, then they automatically, look into the previous 6 years - so 7 years in total.

They only allow a really small window for error - about $100 or something tiny - I know I was surprised because I remember thinking how easy it would be to just mis-key that. Once they find errors of that value or more, they go into it all.

To be fair, it wasn't unreasonable but it was a pain in the arse and very time consuming because you have to prove every single figure, they total every single receipt, they check every receipt to ensure it's all valid etc.

I hate to tell you but they won't let your grocery claim go through without receipts. Even my grocery receipts they went through line by line making sure no toiletries or cat food was on it. But they added up the receipts and only allowed those costs through.

Without grocery receipts, how do you prove that parents didn't supply food? Or that you didn't buy a whack of KD at 59c and that's all you give? Or that you don't go to the food bank and get free food? Or any number of potential situations.

Seriously - their whole mantra is no receipt, no claim. I can't stress that enough to anyone reading these forums.

EDIT

Something to consider too when audited. If they find an issue and they adjust your claim, as you would expect, you then have to pay any missed tax but that's not all. If you have minor children of your own, you will be getting child tax benefit on the 20th of each month. That payment is based on your income level.

So if your income level is changed because of a tax audit un-earth some errors, your income level is also changed for the child tax credit calculation and you have to REPAY any over payment you had. For all the years you are audited. Low income families get GST rebates too every quarter. They will claim them back too if they apply.

Rachael
01-09-2015, 04:36 PM
Hi Mickyc....I keep receipts for any other incidentals I claim....the only receipts I wasn't keeping was groceries....keeping it at 3.50 per child...I don't believe will ask for an audit...and I keep the 40% for space used in the home. I DON'T USE MY CAR....so I am not sure what else I am missing out on....I have had H&R do my taxes for the past 5 years.....

Bet you do use your car. I don't take children in my car but I do use it for business.

Do you go to the bank and deposit cheques for day care fees?
Do you drive to the grocery store for day care food?
Do you go to the Dollar store for craft supplies?
Do you go to Walmart for party supplies or toys or booster seats or face-cloths?

All business miles.

mickyc
01-09-2015, 05:30 PM
agree with Rachel here! I maybe go on 1-3 outings with the kids a year. All the things she has mentioned are all daycare expenses. I tally it like this: I keep all receipts and a total of where each receipt is from. I then just figure out the km's once. so a trip to walmart is 5km's for me, so every time I go to walmart and have a receipt for walmart (even with only using 50% of groceries) I claim a certain amount of gas for this trip. I just have made myself a spreadsheet to keep track of it all and then it is an easy total at the end of the year. Not exactly sure on what portion my accountant claims - that is his job lol.

Now I don't mean this to sound bad but I strongly suggest you get a new accountant. You have missed out on many tax deductions over the past 5 year using H&R. They are obviously not advising you properly!!

A

Rachael
01-10-2015, 09:20 AM
I tally it like this: I keep all receipts and a total of where each receipt is from. I then just figure out the km's once. so a trip to walmart is 5km's for me, so every time I go to walmart and have a receipt for walmart (even with only using 50% of groceries) I claim a certain amount of gas for this trip. I just have made myself a spreadsheet to keep track of it all and then it is an easy total at the end of the year. Not exactly sure on what portion my accountant claims - that is his job lol.

Now I don't mean this to sound bad but I strongly suggest you get a new accountant. You have missed out on many tax deductions over the past 5 year using H&R. They are obviously not advising you properly!!

A

I agree.

My car mileage isn't high because I work from home. I have a car for the convenience of grocery shopping and errands. We don't pack up on the weekends and head off so it really is just local stuff and a bit of being Mom's taxi.

Like Mickyc, I keep every receipt and I know going to Costco is 56.0 kms (28 to get there and 28 to come home again). I know Dollorama is 8.6kms - 4.3km each way.

I have a spreadsheet for my accounts but writing the milage on the receipt works just as well. But for every single day care entry, then I claim those miles.

Also my parents pay by cash or e-mail. I am paid two weekly but because of how different clients started with me, I actually have 4 who pay one week and 2 who pay the other week. So for the cash clients, I am depositing money every week - if that makes sense. So again, 52 weeks in a year is 52 trips to the bank at 8.6 kms return trip = 447 km a year just for the bank.

I do my own household shopping the same trip that I do the day care grocery run so that means that milage can be claimed as business mileage. If you are super slick at this, which I'm not, you can incorporate all your household errands to tie in with business related errands.

Last year my business milage was just under 50% of all the mileage I did for the year. 46.something percent.

So that means I was able to claim 46% of the cost of my car insurance, winter tires, maintenance, gas (keep all gas receipts and add them up for your annual gas bill and then claim your business percentage), MVI which is done every 2 years here, license plate renewal (every 2 years). It adds up. This year I had new brakes all around which cost me $1,500 so my business will pay a proportion of that based on my business mileage.

Seriously - it all adds up really quickly and if your accountant isn't claiming these things you are missing out on a few grand a year!

superfun
01-10-2015, 03:56 PM
So in regards to mileage, if it's a trip just for daycare supplies, you claim in? But if you are doing your own shopping at the same time, you don't claim it? Am I understanding correctly?

Rachael
01-10-2015, 04:23 PM
So in regards to mileage, if it's a trip just for daycare supplies, you claim in? But if you are doing your own shopping at the same time, you don't claim it? Am I understanding correctly?

NO.

Every single trip which is for business, I claim.

So, a trip just for day care supplies, I claim. A trip for both household and day care supplies I claim.

What I can't claim is a trip which is solely for personal/household reasons and so I make sure where I can that I include my own errands with day care errands so I am maximizing my business mile.

Suppose the grocery store is 5 kms away.
If I go there for milk for the day care, I can claim 10kms as business miles.
If I go there for milk for just the family, I can't claim anything.
But if I go there for milk for day care and a second bottle of milk for the family, then those miles can be claimed as business miles and I've saved myself a second trip on my dime.

superfun
01-10-2015, 04:39 PM
I guess I should have been keeping better track of my mileage last year. I thought it was just for daycare trips only, which rarely happens. If you keep track based on the distance from home, and then go to 2 or 3 stores in one trip, do you have a way for keeping track of that?

Rachael
01-10-2015, 06:08 PM
If you keep track based on the distance from home, and then go to 2 or 3 stores in one trip, do you have a way for keeping track of that?

I suppose you could just keep a little note pad in the glove compartment and so if you make a trip to several stores then you have a total business mileage for errands that day.

mickyc
01-10-2015, 09:15 PM
If you are not claiming mileage then you are missing out on so much.
I have made a spreadsheet that I keep track of all my receipts in. I have it like this:
So under Grocery (50% deduction) I have headings as follows: Store, KM's driven, Amount. I just do a total at the bottom for km's and amount. I then have the other receipts for 100% daycare (groceries that I know were completely daycare, office supplies, crafts, toys). I do the same (store, km's driven, total of receipt, total deduction - I sometimes buy other things that are not 100% daycare so I separate totals here). I then total this section and give totals to my accountant.

If I go to 2 stores on one trip then so be it. I still claim full mileage for both but it usually doesn't happen often.

playfelt
01-11-2015, 09:09 AM
You can even buy a little book at staples that is for recording mileage. You get in the habit of writing it down and recording. You start with the mileage in your driveway and then everytime you get home you write it down again as the new starting point and record if that was personal or daycare. Another way to do it if you have a trip counter is to set it as you leave on daycare trip and write down the total when you get home. Those numbers added up over the year compared to the total driven which you will record on Jan 1 and Dec 31 determines the percentage use of vehicle.

sandylynn
01-11-2015, 10:07 AM
I am not into claiming km's for trips to dollarama for craft supplies...it's 7 min away from my house....that's what would prob invite an audit....seriously.. ..what kind of a write off would we be talking here...PENNIES

Rachael
01-11-2015, 11:12 AM
I am not into claiming km's for trips to dollarama for craft supplies...it's 7 min away from my house....that's what would prob invite an audit....seriously.. ..what kind of a write off would we be talking here...PENNIES

My stores are primarily minutes a way but it's not pennies, it's thousands of dollars. Seriously, you are missing out.

If you do 10,000 kms a year and 1,000 of that is day care related you can claim 10% of your entire car costs.
So your Dollarama is 7 mins away, depending on traffic, that's likely 5kms. If you go there and back once a week, that's 520 kms to Dollarama.
You also buy groceries. If your grocery store is as close to you as your Dollarama is, that's another 520 kms a year. Already you can see that's over 1,000 kms. Add in bank trips, Walmart trips, and other running around, I bet at a very minimum 10-15% of your mileage can be claimed for business.

So, over the year you spend $1,500 on gas. 15% of that is $225.00 straight off your income level before tax. If your insurance is another $800 a year, 15% of that is $120. Two basic services a year with no work required is going to be another $200 so you get $30 back. Winter tires at $1600 means you claim back $240.00. License plates get renewed every two years here in NS and that costs me around $340.00 so 15% of that is $51.

It adds up. For 2014 I can deduct just under $2,000 for my car due to tracking my KMs and applying that business % of travel to all my car related costs. I don't have a car repayment as mine is paid for but if you have financing on your car, you can also claim your percentage off the payment interest, I believe.

You might think $2,000 is pennies, but I don't.

sandylynn
01-12-2015, 07:52 AM
Hi Rachel....I forgot to mention....3/4 of the time I go to these stores, I use my husband's company car....so doesn't cost me anything.....so I don't use my personal car very much

5 Little Monkeys
01-12-2015, 08:14 AM
I am organized with my business expenses and such but claiming the car, gas and Km's has always been my weakness...I don't know why!!! Lol. I've just never cared much about them and I know I don't claim as much as I could be

This year I want to use a better way to keep track. (Pretty sure i said that last year too!!) I ended up with only 2 today so that will be my goal for today....getting a spreadsheet ready to keep track!!

I claim Km's if it's a trip that I buy anything for dc, even if I buy personal things....is that correct?

bright sparks
01-12-2015, 08:27 AM
I have been audited but they audited a specific area not my entire taxes. It wasn't daycare related either. I claimed a few thousand dollars for medical expenses, 2 years in a row so a red flag was raised for me to submit proof that I actually incurred these costs where I had to upload every single medical receipt and be sure they included service provider and licensing info.

As for food expenses, I just wanted to clarify that I have been told that up to $10 is considered a fair amount without raising flags. That is not a cap. It costs what it costs and should a provider actually spend $20 a day per child(which clearly wouldn't happen), they could still claim that because it was a genuine expense and as long as there is proof to back it up.

bright sparks
01-12-2015, 08:37 AM
I am organized with my business expenses and such but claiming the car, gas and Km's has always been my weakness...I don't know why!!! Lol. I've just never cared much about them and I know I don't claim as much as I could be

This year I want to use a better way to keep track. (Pretty sure i said that last year too!!) I ended up with only 2 today so that will be my goal for today....getting a spreadsheet ready to keep track!!

I claim Km's if it's a trip that I buy anything for dc, even if I buy personal things....is that correct?

This was my area of weakness too, and I got a right old telling off from my new accountant last time I filed because of consistent empty boxes on my spreadsheet for this kind of thing. My vehicle is solely for daycare which makes it easier for the most part with mileage, but I never keep receipts for maintenance which I know I can claim. Hopefully this year when I claim that area will be a bit better. It is the first vehicle I have leased versus purchased outright or financed so I'm not sure how that works with my monthly payment but we will see.

Rachael
01-12-2015, 09:22 AM
I claim Km's if it's a trip that I buy anything for dc, even if I buy personal things....is that correct?

Yep. If you can prove you made the trip, claim it. So every receipt, every deposit.

I've only claimed the car costs in the last two years. All prior years I didn't bother but wow, it adds up. As said, for me, my kids are teens now and so my oldest has his own car, my youngest has friends who will drive so other than the odd instance of Mum's taxi for parties etc., my mileage is primarily household errands. Groceries, bank, gas.

Since I can go into town and get my stuff done with day care errands, I can write off a lot of the expenses of having a car.

5 Little Monkeys
01-12-2015, 10:57 AM
This was my area of weakness too, and I got a right old telling off from my new accountant last time I filed because of consistent empty boxes on my spreadsheet for this kind of thing. My vehicle is solely for daycare which makes it easier for the most part with mileage, but I never keep receipts for maintenance which I know I can claim. Hopefully this year when I claim that area will be a bit better. It is the first vehicle I have leased versus purchased outright or financed so I'm not sure how that works with my monthly payment but we will see.

Lol, mine tells me the same thing too!! We are mortgage free so I need to find other areas to increase my deductions because I can't claim the interest on that loan. I've done a lot better in other areas this year (groceries and redid playroom so bought new shelves, matts, tots etc) but the car stuff is still my weakness!! I just have to get better at it! I keep all the maintenance receipts and claim the interest on the car loan etc but it's the damn Km's that I'm bad at lol I track some but not all :(

superfun
01-12-2015, 01:35 PM
If you come up with a good system, please share. I am usually so excited to make a new spreadsheet, so this should be something I'm good at. Especially since everyone else has already explained how their systems work. However, it seems like I've hit a mental block, and can't get started. I think I ran into the same problem last January, and never solved it.

5 Little Monkeys
01-12-2015, 01:55 PM
I'm very old school.....I will type it up with headlines but than enter the figures in with pen every trip and than add up at the end of year. lol Now just to remember to do this after every trip!!

My headlines will be "Date", "Store", "Km's" (for the km's driven to other places that I don't have pre-measured) "Amount" and than the category it falls under....grocery, toys, car maintenance, field trip etc.

I hope that makes sense...I'm a visualizer so it's hard for me to describe!! haha

mickyc
01-12-2015, 05:54 PM
I don't understand why people wouldn't claim everything you can! it may seem like just a little but like Rachel said it can be thousands!! I want to keep my money as opposed to giving it to the government.

Superfun- I do the same as 5LM although I do my spreadsheet on my computer. I separate mine already though into a grocery category and a 2nd category for the 100% daycare expenses. I don't fill in km's until the end of the year. I know superstore is ___ km's so every superstore entry gets the same km's.

superfun
01-12-2015, 07:12 PM
Does your 100% daycare get sorted into different types of purchases? Gifts, crafts, etc? What do you do with big things like a new shelving system?

mickyc
01-12-2015, 09:15 PM
nope I leave everything that is 100% daycare into just the one section. I do however put a description beside it for example - art supplies, office supplies, groceries (that I know were 100% daycare), toys, outings. - anything I buy strictly for daycare. I sort everything by date.

As for a shelving system I would consider that 100% daycare. I make a separate section for capital costs. For that I have claimed a new fridge, computer. We just purchased an ipad which I will likely use under capital costs.

I have another section for home repairs. We just redid the whole entire daycare space and my accountant said to put 2 sections in my home repairs this year - one section for daycare space and one section for other household repairs.

My next section is vehicle repairs and expenses.

5 Little Monkeys
01-12-2015, 10:51 PM
When I go shopping, I separate my orders and pay 2-4x lol. Groceries, 100% dc stuff, things I can't claim, car things, Reno things etc. It makes the receipts easy and I don't have to figure out the taxes and such. Than I come home enter them where they need to go

sandylynn
01-14-2015, 09:02 AM
Just wondering....there isn't a daycare opening on this site within 10 km of my home that charges less than $40.00 per day....so...here's my question....that's a $50,000.00 income year....how much would one put aside to cover taxes with double CPP for this kind of income....anyone?

bright sparks
01-14-2015, 09:16 AM
Just wondering....there isn't a daycare opening on this site within 10 km of my home that charges less than $40.00 per day....so...here's my question....that's a $50,000.00 income year....how much would one put aside to cover taxes with double CPP for this kind of income....anyone?

What do you mean by double CPP?

sandylynn
01-14-2015, 09:17 AM
we pay double cpp , ie...we are the employer and the employee...self employed pay 9.9% ....not self employed...is split between the employee and employer

Craftymama1
05-22-2019, 09:02 PM
I am very fortunate to have a great accountant. I used to do my own taxes but found this accountant through my daycare association and have since been very happy with him. He follows guidelines to a T and specializes in home daycares. The company has been filing taxes for the Burlington sector of Halton Childcare providers association for well over 10 years and there are over 80 members and we are very active members and I have never heard of any problems. I know personally a few providers who have been auditted due to higher than average expenses and it turned out that everything was in order with their paperwork.



I know this is an old post, I’m wondering if you’d be able to share the name of the accountant? I’m in the process of opening my home daycare and I’m in Halton :)