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I have started operating since end November and I've earned $1200 till end December from my first family(2 weeks deposit included in $1200 which technically, I did not earn yet). Our accountant told my husband that I do not need to file this year but we can file next years return.
Now, I don't know the rules here but previous country I lived in, tax years starts from 5th April and ends next year 5th April.
Is this correct?
Thanks in advance.
Cocoon
Hmmm ... not sure to be honest!
Income wise I am pretty sure that the reporting tax year goes January 1 - December 31st for having to file your income earned in a year ... however being self employed we have until June 15th i believe to actually FILE but if we owe money we will pay interest on the amount owed from April 30 date.
I know in a few of the centres I worked in that their 'year end' was different for various reasons but with reporting the income for staff we had to base T4 and so forth on the January 1 - December 31st.
I just chose to do my business around the fiscal year of January 1 - December 31st to be consistent.
If you do not OWE income tax you do not have to file this year - you can wait and file BOTH 2011 and 2012 next year and put any 'refund' you might have had for 2011 towards any owing you might have for 2012... your accountant would have to help you with which ever is the better way to do it.
I was in the same boat i opened in September so between September and December my income was a pittance ... however I still filed and got my refund cause I do not like the government keeping my money - I put it in the bank and earned interest on it to help towards what I had to pay the following year instead ;)
Hubby just emailed and said he has a collegue whos wife is also run a day home and he said if it is less then $2000 you can file next year.
Inspired, I'm confused. So you paid tax on the amount you earned? And they refund however much back to you? I don't think your 4months earning is above the threash hold. Am I missing something?
Thanks,
Cocoon
Doesn't your husband claim you as the spouse deduction and isn't there a space where he has to indicate your income which lowers his claim? I think that is how it would work this year. I sure hope you make more this year and get your day home running successfully Cocoon!
I should clarify ... my first year in business I was open from Sept - December for the daycare and earned about $3000 however I also had 'employment income' from January - August that year from my previous employment outside the home that I had paid income tax on and was over the $10,000 and change threshold for having to pay tax on it - so using my 'start up' expenses of the business I was able to lower my income to ZERO between both so I got a REFUND of about $1200.00.Quote:
Originally Posted by Cocoon
However great or nasty thing about Canada depending on your frame of mind - you do not have to make ANY money or pay ANY income taxes and you can still file an income tax report and get a TAX REFUND depending on your household income you get tax credits for other places you paid taxes ... property tax, rental tax, sales tax and so forth .... my mother spent years on 'welfare' never earning an income other than those benefits which were from the government and had no 'income tax' taken off them and every year she got a $2500 plus 'refund' from the government for filing her taxes ... use to boggle my mind how that was 'possible'.
However I know from experience that if I were SINGLE and filed my income tax as such I too would get a $2000-3000 refund annually being self employed and having paid no 'income tax' through out the year .... it is very depressing to see that in the tax software the various other tax credits based on my low income would qualify me for that ... however the minute I add my spouses income to my file it bounces me out of being eligible and instead I end up having to pay about $800 - 1200 in CPP and income tax....I do have single friends in this business though we NEVER pay anything into income tax but get a refund each year!
What is 'best' will depend on your household income - your accountant should be able to help determine that for you1
Momof4, we are newly married so this will be the first time that he can put me on his tax return. And my income is only for a month which is way less then thresh hold. He has an account so accountant will take care of everything.
Inspired, It was me I get confused as the country I came from the tax years starts from 5th April and ends next year 5th April. I told my husband that I should declare until April 5th but I didn't think every country has different ways of doing things :) And also I like to be in control :)
One more question, I read on here that I can claim %100 of the stuff I bought for my day home in first year. Does that mean I can not claim %100 now cause I'm going to file my return next year?
First year means my first year of opening not the first tax year I file return?
Thanks a lot.
There is actually a phrase in the revenue canada booklet that talks about items bought in advance of opening. That would cover using receipts with 2011 on them as a claim when you file at the end of 2012.
For this year probably better to file a tax return and claim the amount you earned under other on the first page. You will owe nothing and there may be things you get back.
Your husband will fill out his tax form and under dependents he will be able to deduct an amount for you as his spouse. The amount you earned from daycare will be deducted from that yes the formula is in the booklet that comes with the tax forms. But it will still give your husband a substantial deduction on his taxes which means there is a good chance of getting more back in the end.
Congratulations on your marriage too.
Hi Coccon
To deduct stuff depends on their value and utility.
Give me a call 416-450-0667
Nicole
www.ndcga.com