Record Keeping!

[playfelt]

I always did 50% of shared toys and yes my kids used them on weekends but they also slept 70 hours a week too. 24x7 = 168 hours a week - 10x7 sleeping = 98 There are only 98 hours that the toys are available to my kids a week and the daycare is here 10x5 so 50 hours. That is how I got to 50%. Any toy for an age I don't have is 100% and any toy my kid no longer play with is sold to the daycare for the other 50% not claimed or what you would pay at a garage sale. Eventually the toys are all 100% write off just not in the same year. Works well because about the time you are able to claim your kids part of the toys, they are on to toys too old for the daycare that will never be claimed.

[Inspired by Reggio]

Yes good point Playfelt - ultimately we just need to be able to argue your expense as 'reasonable' ... the equation I offered was based on the tax seminar I attended at my local OEYC and the using the same equation as business hours open is just one accountants 'interpretation' of a grey area rule ... someone who is very 'cautious' to say the least cause he said claiming more than $2.50 a day for food was 'excessive' and you better have reciepts to back anything more than that up for both your home and daycare ... dude obviously did not do the grocery shopping in his house or assumes kids only need to eat bread and butter cause I average about $18,000 - $20,000 a year just in GROCERIES between home and business and there is just me and my spouse living here full time - kids are grown and no grandchildren yet

As I do not have young children or grandchildren of my own at home to be buying toys for I would not be buying toys at all - so I write off 100% of my toys and equipment as daycare.

[mlc1982]

I see a few of you use Turbo Tax. Do you use the regular personal one or the regular/home business one?

[Inspired by Reggio]

You need the home business one otherwise it will not have the forms for reporting self employment income

[lunademiel]

Ok just one more question! How do I calculate backyard maintenance when it is a shared space? Can I claim a percentage of the deck we need to build to make the backyard safer? The fence? How about outdoor play structures?

Thanks again for all your help!

[Inspired by Reggio]

Ok just one more question! How do I calculate backyard maintenance when it is a shared space? Can I claim a percentage of the deck we need to build to make the backyard safer? The fence? How about outdoor play structures?

Thanks again for all your help!

Yes we can write this off as 'maintenance' we just use the 'shared use of space' equation from the CRA

(Square footage of the space / square footage used for daycare) x( hours in operation / 24 hours in a day) x ( number of days a year open / 365 days in a year) x 100 = the percentage of your expense you can write off.

[lunademiel]

Sorry to be a pain... For this equation do I calculate only the amount of time spent outdoors/in the backyard or do I calculate the total hours the daycare is open?

Thanks

Yes we can write this off as 'maintenance' we just use the 'shared use of space' equation from the CRA

(Square footage of the space / square footage used for daycare) x( hours in operation / 24 hours in a day) x ( number of days a year open / 365 days in a year) x 100 = the percentage of your expense you can write off.

[Inspired by Reggio]

Personally I would do the amount of time I am 'open' same as my other shared use of space calculations cause it is the 'equation' they give us as a reasonable way to figure it out ... IMO regardless of how much time you spend out there it was a shared expense just the same between the business and your personal use ... if we went with how much time I used it personally i could right off my whole YARD cause outside of daycare I am NEVER out there on weekends or evenings cause my neighbors on all three sides SMOKE and have YAPPY DOGS so it is not enjoyable back there at those times - most peaceful during the day when they are all at work

[2angels]

For your steam cleaner - I would write it off for sure ... IMU if it was under $250 (double check that is still the cut off amount) you can write the whole thing off if it was more than $250 than it is 'depreciated' over the course of 5 years.

Hi everyone,
I'm new to all this as well. I am unsure about the above comment about writing off a capital item if it's under $250. I haven't found this anywhere on CRA's website, google searches,etc. AFAIK, if it's a depreciable item, it goes under CCA. Can anyone confirm with a source if it's indeed true we can write off anything under $250 because I have used items like booster chairs, high chairs and playpens that cost $10-20 a piece and I thought this all has to go under CCA.

[Inspired by Reggio]

Reading tax law is like reading Chinese - it is also why many big companies employee big paid Tax Lawyers whose sole purpose is to argue with CRA about the defintition of 'reasonable' in an audit in that company

My understanding is there are something like 100 different 'categories' of CCA and each category has different rules around how you write them off and so forth.

http://www.cra-arc.gc.ca/E/pub/tp/it...it285r2-e.html

To be honest I cannot find anything there about CCA in reference to OUR industry ... it is all farming and other business with HUGE expenditures and equipment which is why I do not think they are so concerned about our little piddly expenses.

When my accountant got me started the first year we added up all the things like booster chairs, high chairs, cubicles, strollers and my wagon and so forth and did the CCA for them as well but not because she said I HAD to but because in that year I had more expenses than income and it was BEST to do it that way because it allowed me to write them off over a period of 5 years at the 20% each year verses 'loose' those write offs cause once your income is reduced to zero you do not get more refund for being in the MINUS ... moving forward she told me any new toy or smaller item could be written off 'entirely' in that business year I did not need to keep 'depreciating' small items and that the 'guideline' to use was anything that cost more than the $250 would be better depreciated - however she did not show me that anywhere in writing cause it is likely an 'unwritten rule' in the tax community not a steadfast one.

Seriously if a business buys a stapler for $25 they do not 'depreciate' that over the course of 5 years they write off the entire portion ... I worked in administration in centre for 7 years and helped prepare tax stuff for those and in that industry and while in their FIRST start up year they did the 'CCA' for ALL that equipment as start up capital .... after that they would write the whole purchase of a toy or classroom item in one year cause that was small ticket to them - they never depreciated anything except for BIG ticket items like the industrial dishwasher that was $8000 or the computer system for the Video over the Internet or the classroom computer systems and so forth?

Sorry not more help - maybe someone else can search on the CRA website better but when I search CCA and HOME based business nothing comes up but the farming cause I am assuming that we are not spending the $$$ they are concerned about?