HELP!! New to the daycare game :)

[Inspired by Reggio]

Everything you need to know 'tax deduction' wise is on this page here ... claiming your income, expenses, issuing receipts and so forth

http://www.cra-arc.gc.ca/tx/bsnss/tp.../menu-eng.html

Basically you can claim a list something like this

• Food & Kitchen Supplies
• Toys & Equipment
• Craft Supplies
• Field Trips & Outings
• Gifts & Seasonal Celebrations
• Office Expenses
• Advertising & Website
• Business Name Registration
• Accountant / Accounting Software expenses for taxes
• Daycare Maintenance & Repairs
• Professional Development
• Interest on Line of Credit for Business
• Interest on Credit card for business
• Vehicle Expenses ~ track KM used for business keep reciepts for all vehicle related costs
• Business Liability Insurance
• % Home Owners Insurance
• % of annual Mortgage Interest
• % of annual Property Tax
• % of annual Gas bill total
• % of annual Reliance Water Heater Bill
• % of annual Hydro bill total
• % of Internet Bill if you have a business website you need to maintain
• Phone ~ not the land line unless the daycare has its OWN number but you can claim the 'call answer / display / forwarding' services if needed for the business

As for registering your business name ~ in Ontario under the Business Names Act YES if you advertize your business by any name other than your legal name you need to register it with Service Ontario .... however daycare is exempt from the HST, WSIB and other things so just click 'no' when it asks you you are only registering your BUSINESS NAME ~ it costs $60 and is good for 5 years .... benefit to this is also that you will get a Business Identification Number so you will not have to provide your SIN to clients on their tax receipt!

http://www.ontario.ca/en/services_fo.../STEL02_039990

Calculating 'shared household expenses' the equation from CRA is as follows

Rooms used for both daycare and personal living

If you use part of your home for both your daycare and personal living, calculate how many hours in the day you use the rooms for daycare, then divide that amount by 24 hours. Multiply the result by the daycare part of your total annual home expenses (see the previous example). This will give you the home expenses you can deduct.

If you run the business for only part of the week or year, reduce your claim accordingly.

Example
Danny runs a daycare in his home weekdays from 7:00 a.m. to 5:00 p.m. (10 hours out of a 24-hour day.) The children use an area of 35 square metres. The house is 100 square metres, and the annual home expenses are $5,800.

The calculation is as follows:

(10 ÷ 24 hours) × (35 ÷ 100 metres) × $5,800 expenses = $845.83

The daycare only operates 5 days per week, so Danny has to do another calculation.

The other calculation would be:

$845.83 × (5 ÷ 7 days) = $604.16

Danny can deduct a total of $604.16 for home expenses.

If you have not yet created one ~ get a contract! Lots of examples on the forum just search 'contracts' and you should find the threads!

Hope that helps and congratulations on your long awaited addition to your family and the world of home childcare!