Hi, I'm just opening a home daycare and I have no idea on how much to put away for taxes? Can anyone help me with this. Thank you so much :-)
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Hi, I'm just opening a home daycare and I have no idea on how much to put away for taxes? Can anyone help me with this. Thank you so much :-)
I put 15% of each pay in the bank.
Really Blue Rose thats an awful lot to put away if you have lots of right offs. I calculated how much my top line would be for a full year at capacity, then found out what 15% of it was. In the 6 years that I have filed my taxes I have had 2 years where I have made within 2000 of my maximum potential income and my tax and cpp combined have been less than what that comes to. I end up paying at most 7.5%. I always air on the side of causion, prepare for the worse case scenario with everything so I think that 7.5-8% should be more than adequate.
I try my best to budget for one daycare child's fees to be set aside to pay for things like taxes and then anything left over is spent on the outsidethat summer including new toys, bubbles, flowers, etc. or upgrades.
Ok so I feel dumb for taking 25% off and saving it for tax time. Really 8% is enough? That is a big relief I can have more income lol. Always a good thing.
I was told to put away 30% lol So I'm very happy I can put away less!
My accountant called today with the results of my taxes and after all my deductions it worked out to 20%.
Ok accountant just called back and he hadn't included my property taxes or my mortgage interest and so the new calculation works out to 15% (including CPP)
My accountant said 10% but that if I make over $30,000, I need to think about paying HST- has anyone charged parents HST?
Home daycares are exempt from HST. You can google HST exemptions and the Revenue Canada page will list childcare/daycares.Quote:
Originally Posted by Fearlessbaby
I made over 30K last year and I had to pay back about 11.5% of my income even despite a lot of write offs
I don't know about percentage, I'd have to ask my accountant (I'm sooo bad at math haha) but I have paid back about $2500-$3000 each year if I remember correctly. (after deductions and such, I technically only make around $15G though) I like to save throughout the year so I can pay it off in one shot and not have to pay interest. This year I have been awful at saving but hopefully can get back on track as I really don't want to have too make payments!!
LOL 5LM - about the percentages. I guess I should make it simple and say that I had to pay back over $4000 when I made over 30K ....and it hurt A LOT :crying:
I am trying to put a but over $100 a week aside now. It's amazing how poor I feel by taking some income away each week
It's probably quite simple to figure out but I don't even care to try! haha.
$4000 on $30G sounds pretty close to $2500 on $15G, so we probably have the same percentage....or no? Am I totally out to lunch in my way of thinking? lol ( I likely have a bit higher of one)
I started the year off doing well but than "borrowed" from it and never replaced....oopsies! ! haha
Similar - we're allowed 6 children so I set aside one child's day care fees for taxes and it's usually about right.
I paid about $5000 last year, even with about $13 000 on write offs. It also depends on your spouse's income combined with yours.
Eeeks you were around 16.5 percent. (Shudder)Quote:
Originally Posted by 5 Little Monkeys
It sucks to get the cash and then have to pay it elsewhere. I never felt it was that painful when I just got a paycheque after deductions.
LOL at your 'borrowing'. I have been so tempted when car repairs come up but my husband is after me to be prepared and wants me to have $4500 saved before April
I'd have to pull out my papers to get the exact numbers but I'm pretty sure I'm close on my estimation. That's including my CPP and EI though too. I just call it all taxes because I have to pay it all anyways lol
Your husband is like mine...he refuses to let his bank account go under a set amount. I however am a bit more relaxed when it comes to money.....although, I have usually always lived pretty close to paycheque to paycheque whereas he hasn't so he gets nervous if it goes below his comfortable amount LOL
Truly ????? I thought with deductions I would break even !!!! Ugh !! There goes the budget I just made !!!!
Do any of you pay an assistant ? I was hoping that would lower my taxes !!!
I don't have an assistant but I would assume it would lower your taxes
Would you have to pay your assistant Workers Comp, etc like a real employee though? I am not too sure what the responsibilities would be in terms of you offering stat pay or get insurance for an employee.
I think you could deduct the salary as an expense but you will also considerably cut into your earnings when you hire an assistant and you won't be able to add any more children. I guess it is a big decision whether having the extra pair of hands is worth it. :)
Although paying an assistant will be a business expense, don't forget that as their employer, you also have to pay 3% of their CCP and you are responsible for deducting their s, topages - tax, employee CPP contribution, EI, etc. You certainly won't be able to deduct more than it cost you, presuming to can recoup the entire expense as a tax deductible. The best that will happen is these employee costs will come off your gross business income, reducing your nett business income and therefore reducing your personal gross income. If you are lucky, it might save you from being in a higher tax bracket but that's all.
My accountant advised me to hire her as self employed , she then bills me her hours and I pay her . Otherwise I was told she would be a partner , having to share all the deductions I have available . She paid taxes the same as I did , as self employed . I write off her earnings and I do not have to pay her cpp , ect .