Feeling really bummed out about taxes!

Good morning everyone

So i started my income taxes for this year without claiming anything (eg. Food and stuff bought for the daycare) just what parents have paid me I owe the damn government $4000. I am feeling dis couraged about doing daycare i feel like if i work a min wage job it will make no difference. I need a little pick me up once i add in the stuff i spent for the daycare do you think the $4000 will go down alot? I already owe money from the year before because they did take enough off of mat leave.

I didnt do my income tax yet... and its my first year too, now you are scaring me lol :\

Did you include all your home expenses ??? or nothing yet ?

Don't forget you can claim portions of your utilities, mortgage interest, insurance, toys/supplies, ect Even if you bought the play pens or high chairs toys ect at garage sales or from kijiji you can still claim them, and don't forget you will have to pay cpp. Oh and you can write off a certain portion of your house...... I have an accountant do my taxes and he gets my income way down.

Hi Sweetness, try not to be too bummed before you get the whole picture - no sense borrowing trouble, right ? :yes: If you don't mind me asking, how many children are you caring for ? Which province are you in ? I am located in Ontario. The first year that I did home daycare I only made (approximately) 18,000 dollars. (We had just moved to our new home, and I only worked for 9 months of the year, and I was only caring for 2-3 children as I was just getting my client base established) It may have been even less after I deducted my toys/food/office supplies/utilities/housing costs/home insurance. CRA has a fairly good list on their web site listing what you can claim as a business expense. Hopefully you've kept receipts - taking off your expenses can make a big difference in what you "make" annually.

I'm almost sure that you won't be paying 4000 dollars in taxes - it sounds a bit high. That said, just remember even if you can't pay the entire amount at once, you can send post dated cheques and pay it in "installments" over whatever period of time works best for you and your budget. Lastly, we would still be paying taxes even if we worked another type of job - and we'd have to pay all of the other expenses that come with it. (parking/transportation/lunches/office "gifts" etc. /) I know when I worked in an office that this kind of stuff was a real pet peeve of mine. There was always somebody having a birthday, or a baby, or looking for a donation for a walkathon. Don't get me wrong - my husband and I donate to a number of charities and I fully recognize the good work that they do. BUT....a toonie here, a fiver there - it all adds up and it really eats away at your bottom line when money is tight. I often wished that people would be more observant - if someone is brown bagging their lunches, and bringing their own tea bags as opposed to buying a drink maybe they really don't have 20 or 30 dollars a month to donate to different causes. (Okay - vent over)

Try not to panic - taxes are never very satisfying to pay, but they're just part of life. Would it make things easier for you if you just took 20% of each week's earnings and set them aside in a separate account earmarked for your taxes ? That way you wouldn't see the income, and hopefully even after you paid the taxes there would be a little bit left over for something for you. (that's what I do):laugh:

I will never, ever do my own taxes. I suck with math and I can't imagine anything more mindnumbingly boring to spend my days at. PLECH! I pay the $300 or so and get H&R Block to do it. There's a specific person at each office who does small business, so I believe he's actually an accountant, not just some guy who took the training to do regular taxes. At any rate, I've only ever owed twice ($1100 each time) over 12 years. Usually though, I get a little back....typically enough to cover the accounting fees.

I can't believe you owe $4000....Holy cow! That can't be right. You can write of EVERYTHING!!! Well, just about. When I buy new furniture, yup, write off. Toys, even for my kids...write off. All groceries (they work out the formula), hydro, heat, gas for the car, car repairs, equipment rented or purchased to maintain the property, flowers in my gardens, new computer (advertising/communication), cell phone and monthly fees, camera, printer ink, internet, netflix....everythin g. I even wrote off my new comforter set. Why not? A couple daycare kids peed and barfed on it, then another pulled a bunch of threads out of it.

My accountant put it well - you can write off anything used for the daycare or even that's in place to make the daycare look appealing to potential or current clients.

wow, you must have made alot of money to owe that much. I would suggest an accountant to do your taxes.

I just had my taxes done and this was my first Full year of doing daycare. I got a couple of hundred back. I have an accountant do it. You can find all sorts of people who do taxes out of their home. Check with some other daycares in your area to see if they have anyone they use. I've heard that H and R block is not good for small business. They charge too much and they don't always write everything off that you can. I don't know that from experiance, but I've heard. I have a private girl do mine for 75 bucks. $300.00 at HandR sounds like a lot to me.

Prior to my daycare days I always had H&R block do my personal taxes and they always did a great job.

Everyones situation is different. I get different write offs because of my relationship status, my kids age, fitness tax credits, charitable donations, RRSP contributions etc.

Re do them with all of your write offs. I give my accountant all of my house hold bills including insurance I pay on the house. ( I have an extra rider because I own a home bases business )

$4000 can't be right. Don't get discouraged.

cfred, I pray you don't get auditted because whoever is telling you to write of the cost of flowers for your garden is clearly out of their mind. You can right off an incredible amount of stuff but only a percentage on a lot of stuff unless it is exclusively used 100% for business. It's okay to put whatever you want down on your tax return but if you get auditted and the cra start digging around, I'd imagine a lot of us would end up with a bill based on writing off items which are just not acceptable regardless of what some accountants say. They aren't all created equally. You said you pay $300 at H&R block?? That is expensive and H&R Block really aren't specialized from my experience. They even missed things off my husbands individual tax return the first year we filed taxes in this country. Hence why I didn't go back. You'd have to have a pretty convincing arguement for the CRA for thinking that flowers were NECESSARY and even then they can do whatever they want. I write off lots, but I am sure to make sure that it will be something I can justify. I used to write off all books even my kids books but now they are getting older I can't honestly justify to the CRA that a Harry Potter book was for my daycare kids. The same with Toysrus purchases, I can't say a computer game is for daycare use. Just be very careful ladies that you don't overstep the mark by taking TO MUCH advantage of this ability to write lots off. Things have a way of biting you in the ass when you least expect it.

I recommend calling a few accountants and asking them what their experience is with working with home daycare providers as there is a lot that applies to us that isn't necessarily the same as other small businesses and people who have a home office. Keep spreadsheets outlining all your daycare related expenses and keep all reciepts FOR EVERYTHING. If in doubt ask your experienced accountant if it can be written off or call CRA for confirmation. $4000 seems like to much to pay in a year even if you were maxxed out with your childcare spots. I can send you a spreadsheet of different categories and items you can write off if that is helpful. Just send me a message and I will send it to you. Make yourself a cup of tea and push the worry to one side. Get all the facts together and then see how much you owe. Fingers crossed its less than the 4K and regardless, you can make a payment plan with CRA and you'll have an idea as to how much to save monthly for next years tax bill :-)

I do have an accountant she phone me last night to tell me she was starting it. She didnt put any of the deductables yet. Its based on what i made for the year. I try and put money away each month but we end up using it for some months. Last year i found i couldnt save around christmas time the summer when i had school age kids they tend to eat more and my food bill went from 250/month to 400/month. So as it stands this is the last year i take school age.

What? You have an accountant and she told you you owe 4000 without the deductions? Why would she tell you that? It just sets you into a panic.

Bright sparks is right about justifying everything! I make notes on all of my grocery bills if something isn't being used for daycare. Books, toys r us etc. I make notes on everything. It's best to be prepared.

why would she call you and tell you that, that is weird. As for the flowers where they a project with the kids, did they have to take care of them.

That doesn't make a lot of sense because our deductions come off before we even get to the bottom of page one. Everything from there on is based on the amount we earned AFTER our deductions as in net income not gross income. Then you take things like basic personal expemption off, etc. I don't have a lot of additional deductions other than that as my husband claims most of them including the kids.

Also make sure that she is basing the amount of Canada Pension you owe on the net income and not the gross income too.

Bright Sparks - the children come with me to purchase our flowers, herbs and vegetables and help plant them too. It's a daycare activity. We also use things from the garden for crafts. In addition, when we have summer birthdays, I use flowers to decorate the cakes. These are totally above board daycare costs. I never write stuff off that's questionable. I use everything the accountant tells me I can write off and can back it up with my plans within the daycare.

With stuff for my kids, that's a thing of the past now as they're teens. But when they were young, their toys were used by kids as well because they had little friends in the group. When a bit older, I did write off a few games as one boy in my care was older and best friends with my boys. They played the games alot. I figure it counts.

The guy I use is an accountant. I can only use him as the others aren't qualified. I also like that they deal with CRA if anything crops up.

When I say you can write everything off, I assume it's inherent that it's a portion. Nothing is 100%, but if it's used in any way for the daycare, I claim it.