Hi, I'm new here, and am hoping to have my daycare up and running by July. I still have a lot of unanswered questions. But right now I'm wondering about what the benefits are for claiming and not claiming the business.
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Hi, I'm new here, and am hoping to have my daycare up and running by July. I still have a lot of unanswered questions. But right now I'm wondering about what the benefits are for claiming and not claiming the business.
Well, the benefits are that claiming your income is legal and not claiming it is illegal. Also, claiming it means you can write off your: mortgage interest, part of your vehicle costs, groceries, craft supplies, a portion of each bill (hydro, gas, water, internet, cable TV, ect), any costs to advertising, ect. There are lots and lots of writeoffs. Yes, you might still have to pay taxes, but it will be worth it...especially considering that most parents want to be able to write off their childcare costs. Filling childcare spots is much, much easier if you provide receipts.
As someone who utilized home daycare in the past, I never would have gone with a provider who wouldn't give me receipts to write off my childcare expenses. It's a HUGE benefit to the parents and makes a big difference on taxes. I don't know many parents who would agree to pay daycare under the table unless they, themselves, were paid under the table. Most need to be able to claim it.
I agree with Emilys4Guppies. I always give parents receipts and claim 100% of my income. It benefits my family more that I claim my earnings. If we are applying for a loan or selling our house, I need to show that I have an income as well. Plus down the road I will be glad that I was paying into my Canada Pension.
I also think that if you get paid under the table that you are giving the parents the upper hand. If they are late paying you or short change you, there is not much you can do besides cutting your losses. My parents sign legal contracts that I can later use to my advantage if I need to collect money.