If a client pays by cash, do you issue a receipt every time? Or have them sign somewhere? Thanks!
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If a client pays by cash, do you issue a receipt every time? Or have them sign somewhere? Thanks!
I take payment in half cash and half cheque right now. they only get receipts for the cheque but this is for my full time clients only, which I make sure get the maximum money they can claim for the year. I don't really benefit from this myself. The money just goes to my assitants who want their pay in cash so I'm reconsidering this. I do have one client who I have a different agreement with. She gets a full receipt no matter what/how she pays cause she's a single mom. But our accountant said I can claim everything, give receipts for every amount whether its cash or cheque. It wouldn't make a different in my taxes.
I give receipts for every cash payment at the time of payment. Then I give each family an official tax receipt in February for the entire amount they have paid in daycare costs. In Ontario, it is illegal for a daycare provider to not provide receipts for tax purposes for the full amount each family has paid. Not sure if this is different in for other provinces though.
I have a dollar store receipt book that has duplicates. All my daycare families pay in cash with an occasional cheque if they forgot to go to the bank. As soon as I receive a payment I write out a receipt for the week or 2 weeks payment. At the end of the year I tear out all the original copies for the parents at one time and type up a page showing every payment with dates and a total and we each have a copy of the receipts and that page. This has been working great for me because nobody has ever lost a receipt this way.
Yup, same in Alberta. I think that stands true for all the provinces. It is technically illegal to not claim/give receipts. But a lot of people do this work under the table as well with pure cash which is never claimed, which is "illegal", but none the less, it is done. I lived in Toronto most my life before coming to Calgary and its even more prominent there.Quote:
Originally Posted by michellesmunchkins
I have a cash log for each family and whenever I get paid I put the amount and me and the family signs. By doing this we avoid the confusion.
Yup this is me as well.Quote:
Originally Posted by michellesmunchkins
I get there is a 'culture' of working under the table in our society however I do not get WHY people do this in THIS industry ... because seriously in this line of work you can easily claim ALL your income honestly and openly and by the time you add your 'expenses' to doing the business you only end up paying basically your CPP portion which is an investment in your retirement anyway...and heck I know people in this industry who operate illegally, claim all their income and after expenses get a REFUND still because they are single parents and get all those 'tax credits'.Quote:
Originally Posted by Dayhome Mamma
If you have no CPP on record with the Canadian government you get no CPP upon retirement ... and do not know about others but I find it hard to save additional RRSP contributions on my income alone - if not for my spouse making a good income and getting a pension from his job we would have no savings and be in trouble come retirement and well I am a planner I need to keep in mind what happens if come retirement I am SINGLE again and have to rely solely on myself!
Plus I do not understand why clients go alone with the only getting HALF their receipt or NO receipt at all - they are entitled to ALL of it for their own income tax purposes - claiming childcare expenses can knock a client into a different lower tax bracket and open up many other tax credits to them and either reduce their own tax paid or get them a higher refund.
I admit I am too paranoid - but I would be afraid a client would 'agree' to an arrangement like this and than change their mind and REPORT me after the fact ... saving a couple bucks a year in tax is so not worth the potential back tax of an audit not to mention FRAUD charges for openly engaging in arrangements with clients to defraud the government of income tax :(
Also with paying employees under the table ... be careful there as well because not sure about other provinces but in Ontario you cannot be required to 'opt out' of your employment standards act entitlements ... meaning that an employee can agree to one thing with you and for months get paid under the table and than still go to the Labor Relations board and COMPLAIN that you made them contract out of their ESA rights and they were desperate for work so agreed but now they want their EI they are entitled too, they want their CPP payments made, they want XYZ that 'employees' are entitled to from you and if you are found to have been paying them illegally under the table YOU will be owing all that BACK PAYMENT in employer remittances PLUS being fined by the Labor Relations Board... this the RISK is so not WORTH it at least IMO!
I totally!!! agree with above post. To add, if I know anyone cheating the system and claiming for benefits I would and in fact I did in the past report them. Me and my husband are working very hard for our salary and we do not wish our taxes to go to someone who does not deserve! They are cheaters, they don't care about other people who really need help so why should we care about them and not report them.
I only issue receipts once per year, in February. If families wanted me to provide them weekly, I would, but nobody has ever asked.
Regarding Toronto, this may have well been the case in the past, but I personally know at least a dozen home daycare providers, and ALL of them without exception are on the books.Quote:
Originally Posted by Dayhome Mamma
Good points ladies. As mentioned earlier, my accountant has stated that I should claim it all as there are so many tax deductions that I won't end up having to pay any unnecessary tax, so that's what I plan to do. Not too worried about paying my employees in cash though, though I do get your point Reggio....i just feel that that would be an extreme case and quite unlikely to happen. ..I Also know that if I didn't offer the cash option, I would have only half as many people interested in the job, and perhaps miss out on the "good" ones who are out there. And that's really more important for me. I guess i have been too much around it to not think so much of a deal about it. From Carpenters, home renovators, painters, artists, gardeners, cleaning ladies, childcare just happens to be on that popular list of jobs people often do for cash. And that is anywhere. Any province. Any State. I'm sure it hasn't subsided one bit. If anything, it has probably grown with the economy going down and people needing to make extra money to survive. I'm actually quite surprised that there seems to be such a gasp about it :) It's very interesting.
I only give you one receipt a year regardless of your method of payment.
I am definitely providing year-end receipts to all clients and claiming all income come tax time. Cheating the system or clients isn't what I meant. It's just e-mail transfers and checks leave a paper trail but cash doesn't. I purchased the duplicate receipts book and will provide receipts the day of cash payments; and have the parent sign it as well. Then they get copy and so do I. Sounds like a plan :) Thank you!
I have the duplicate receipt books and give a statement every week when they pay. It is the prove that they did pay. I still give an annual receipt. For any family that leaves on bad terms I can just say sorry you got your receipts - not my fault you didn't save them and I like that, lol. I just like having the paper trail for me with everything numbered and recorded in order so there is no way to argue that something wasn't claimed as in I am not scrambling to find bank statements to prove what was a daycare deposit of a cheque or what was from a coupon rebate or in my case for felt sales.
Exactly the same as Playfelt!Quote:
Originally Posted by playfelt
I give receipts in January and July, for the preceding 6 months. If a client was paying in cash, and they requested receipts for every payment, then I would likely agree to it. But I STRONGLY encourage people to use email transfers. They have records, I have records.
I know it's not what you were asking; but I personally know of MANY providers who are working "under the table". I do think it's a very short term perspective, due to what Reggio mentioned. It doesn't really bother me, though, since I feel like it is only to their detriment in the end.
I wanted to claim my income because I wanted to "exist" as far as banks, etc are concerned. We know that we will be moving in the next 5 years, so when it comes time to go in for that mortgage, they don't just take your word that you are a daycare provider earning x-amount of dollars annually. They need to see those Notice of Assessments from the last 2-3 years, sometimes longer!! For tax purposes, there are enough available deductions and write offs that I am not worried about paying too much in taxes.