Help - Worksheet for expenses and Ottawa accountant ???

If the thought of a large excel type spreadsheet seems overwhelming go back to the way we used to have to do things before we had computers. Paper and pen. Take a wad of lined paper and put the catagory at the top of the page. Then go through your receipts and put the items on the correct pages - date (even just month is fine) item, cost - note if you are taking items off say a walmart bill put the item down and then a plus t to mean add taxes to the total later. If the bill is specific like you bought one item on the bill and the taxes are done then record the total as is. Add up the pages at the bottom and then that gives you the totals to work with.

Star with household expenses as that is the easiest. Make pages for heat, hydro, water/sewer, property taxes, the amount of interest paid in your mortgage payments (bank will send you an annual statement usually).

Catagories I think I use are administration - I put things like my membership to CCPRN here.
Advertising if you paid for an ad, bought business cards, bought posterboard to make posters, etc.
Office - computer ink, paper for printing, pens, pencils, lined paper, staples, tape, paperclips, reciept books, binders, page protectors, whatever you buy to help you run your business.
Supplies - toys, crafts, food, cleaning supplies.
Repairs and maintenance - can be things like new batteries for toys, repainting the playroom, shampooing the carpet, replacing something damaged by a daycare child such as pushing the screen out of the door or yanking on a cupboard and breakng the child lock.

CCA which is if you bought big stuff and you just follow the chart in the tax package to figure out what you can claim ie transfer the total from the chart over to the other line.

Vehicle costs if you claim this

Forgetting now what else is on there but that is the basics, Yes it seems overwhelming but once you get started it actually goes not too badly. Start by dividing your receipts by month and then dealing with each pile at a time putting the totals from the bills on the right pages. Groceries can just go into a general pile as there are other ways to figure out the amount to use and there is really no consenses on this one.

Actually good advice I just thought of if you are in Ottawa - attend one of the tax workshops that CCPRN is offering - usually in Feb-March. It will explain a lot of the process and there is someone from revenue canada there to answer questions - ie get as much done as you can now on your own as far as sorting goes and then go to the workshop.

Also on the CCPRN homepage on the left hand side I think it is there is a link to the start up kit. In that kit will be some tax information about the kind of receipts to save. That might have an actual worksheet in it.

I have a question regarding home insurance. Do you claim the daycare endorsement part as an expense or does the entire insurance amount including the endorsement go under shared expense where you claim based on percentage of use? On my statement, the endorsement is included in my premiums. There's no breakdown of how much is my regular home insurance and how much is daycare endorsement.

Ok now I have a question as well, do I have to do a breakdown of all my family expenses (food, bills etc) or if I have kept all receipts seperate can I just do a daycare one???

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Originally Posted by 2angels

.... There's no breakdown of how much is my regular home insurance and how much is daycare endorsement.

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I would call and ask them to send you one with the break down ~ your home childcare ryder should appear on its own 'line' with the cost that it incurs beside it.

You can right off 100% of the 'ryder' and a 'shared household expense' portion of the remainder based on your square footage of home used, hours of operation and days per year you work.

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Originally Posted by Calgarymom

Ok now I have a question as well, do I have to do a breakdown of all my family expenses (food, bills etc) or if I have kept all receipts seperate can I just do a daycare one???

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If you have managed to keep all your receipts for food and so forth separate than you would just use those for recording your expenses ~ it is advised that you need to keep your 'personal ones' on file as well should you get audited you would need to prove that what you have claimed was not 'shared expenses' by showing what you spent for your family portion.

There are going to be some things you need to do the 'shared expense' equation for unless your daycare is totally self contained and has it's own 'bills' just for that area .... mortgage interest and property tax, hydro, gas, home insurance, water heater or softener if you rent one for example are all shared expenses ~ you can only write off a portion of them dependent on the square footage of your home use, the number of hours you are open, and the days of the year you work.

Typically this works out for most providers to between 20 -40% max .... the higher % you are writing off the more of a red flag it is going to appear to CRA and put you at risk of being audited ... basically it has to be less than 50% because to use that % would mean you are using 100 % of your home for business, are working 365 days a year and are open 12 hours a day in order to come up with 50% shared expenses. Most of us do not use 100% of our home because we are not allowed to count 'closet space and non living space' so it might be 'close' to it but not 100%, and most of us only work a max of 240 days a year because we do not work weekends and take at least two weeks vacation a year and are closed for the 10 stat holidays, and most of us do not work 12 hours a day ... so all of those things 'lower' the % you can write off specific to your business model.