Tax woes in august!!

[Inspired by Reggio]

Ya your dilemma sucks for sure ~ but unfortunately what you were doing was 'illegal' and CRA will not take ignorance of the rules as an excuse specially when a quick google search will bring up their operating a home childcare business out of your home brochure with all the rules in it.

I will admit this is why I do not understand the practice of working 'under the table' because the risk is HUGE to the provider if caught and there is no benefit to the CLIENT because someone who is working under the table likely does not carry insurance and all the other business precautions that protect the client not to mention the TAX CREDIT they are loosing often does not = the 'savings' they thought they were getting ~ aka it costs them more in the long run if they are not claiming childcare tax credit!

Plus as you are learning even if you charged her less in exchange for not providing receipts and they 'agreed' there is nothing from stopping them from claiming the expense anyway after the fact ~ yes they run the risk of getting audited and them saying 'no we are not accepting this claim because there is no SIN or BIN to back trace the receipt from' ~ however there is nothing stopping her TRYING to creating her own proof of expense and providing them with the information she has about your service ~ aka if she paid by cheque giving cancelled cheques with you name on them and even if she paid by cash printing out her bank statements that show she withdrew X amount each week and giving your name, address, and contact info and sending them over to audit you

How much income are we talking between April ~ December of last year that was unclaimed? My advice would be to redo your taxes properly claiming all your income not just this ladies but the other people you did not issue receipts too and see how much 'difference' it makes between claiming the income and a 'guesstimate' of all your expenses for those 9 months even if you do not have receipts there are things you can show based on receipts you are keeping NOW to back up those expenses in your first year ~ you might be surprised that you do not owe any more or you might even get a 'refund' depending on your income cause my first year I had more 'expenses' than I had income ~ either way I would refile for sure and just 'explain' that you were unaware at the time that you had done them incorrectly and now are wanting to fix it ...cause IMO better to be safe than sorry if you are 'audited' and you owe back taxes they charge you compound interest on it so that $400 you might own now 7 years from now could equal triple that

Sending quick and easy solution vibes your way ~ every adversity we face in life makes us stronger and wiser!