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Thread: Taxes

  1. #1
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    Taxes

    Hey Everyone-

    This might be a personal question-but really I am just trying to get an idea. At year end do you all owe money for your taxes? Do you owe over/under $1000? Obviously any info would be appreciated - but only answer the questions you are comfortable answering! Just don't want to be too surprised at tax time!


    Thanks!

  2. #2
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    Yes, I owe money at tax time. It's usually anywhere between $800-$1100 depending on how much I made and my write offs for the year.
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  3. #3
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    Yes, I usually owe somethng. About the same as Fruitloop, most of the time it is CPP.

  4. #4
    Euphoric !
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    The good news is that in your first year you are likely to owe not much more than the Canada Pension contribution of self employed earnings because of the start up costs you will be writing off such as playpens, highchairs, toys, supplies you bought to get started that you will use for many years to come. Have never paid over $2000 and many years paid nothing although the formula and percents have changed over time too. If you plan to set aside an amount like $2-3000 then you shouldn't be surprised with an extra bill and will likely have some left over to treat yourself or your daycare to something with the unused amount.

  5. #5
    Euphoric ! Inspired by Reggio's Avatar
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    Yes ~ sadly none of us will be able to give you the same answer even if we all make the same amount of money and have the same expenses roughly because how much we pay in 'income tax' is also ultimately affected by our vastly different 'household income'

    Your spouses income can make some of us ineligible for grants / tax breaks / rebates that other providers do get because their spouses income is either lower or they have no spouse at all or they have more 'dependents' and so forth which reduces their amount payable.

    I agree with Playfelt ~ I have never heard of anyone having to pay more that $3000 unless they had a really cruddy accountant who was not doing their job at getting them every legitimate write off possible ... I have a peer who had that experience her first few years and thankfully found a competent account who REFILED and was able to get some of her money back and lower her taxes considerably!
    Children construct their own intelligence. The adult must provide activities and context, but most of all must be able to listen. Children need proof that adults believe in them. Their three great desires are to be listened to, to understand, and to demonstrate that they are exactly what we expect."
    Loris Malaguzzi

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    This is great news! i am just starting out and had heard that i should set 40% of my gross income aside for income taxes. i have been trying to figure how to budget for income tax, rrsps, resps for my 2 kids, daycare supplies, and then the rest of my household bills. after reading this, for this year i will plan to put aside $3000 for income taxes. i feel like i just got a raise!!!!

  7. #7
    Expansive... BlueRose's Avatar
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    last year was my first year, but i put 15% from each pay into a separate bank account. I hope I don't need to us all of it at tax time, but its there just in case. If I don't use it at tax time, the plan is to leave it in the account for helping during a slow time, emergencies or hopefully retirement.

  8. #8
    Euphoric !
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    Remember when they say 40% of your income that means taxable income. For us that is the amount left over after we have subtracted our expenses. So for example if you made $35,000 you don't use that figure but you take your expenses off and let's say that leaves $15,000 - 20,000 then that is your taxable income. And the amount of tax you pay is on a lower amount still because it is on the amount after taking deductions like the personal exemption amount.

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  10. #9
    Euphoric ! Inspired by Reggio's Avatar
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    Ya ... incomes in the 40% tax bracket are for people earning Millions of dollars a year so you've got no worry of that in THIS industry

    Home childcare provider, after the basic personal tax exemption Playfelt mentioned, are likely to be taxed in the 15% - 21% tax bracket depending on what your charge, if you are full all year and what your expenses for your program are ... so if you are setting aside 15% of your GROSS or before expenses revenue each week that should cover your taxes, your vacation time AND have left over of your rainy day fund!

    This is what I do for my budgeting ... so based on my fees 15% to go into savings each week is $130 a week when I am full which I have been basically since I opened so at the end of the year that leaves me in average $6760 in my business savings account ... I can take out $1740 annually if needed when I take vacation as my 'vacation pay' to pay any bills and that leaves me $5020 still. Than if I need I have $1740 available if I am take the full 10 days of personal time I budget for. That leaves me still $3280 is left for tax purposes in that account ... I have never paid over $1000 for taxes ... so each year I have been able to 'save' in the business account at least $2000 and to be honest most years I do not need to take my full vacation pay or personal days out of my savings because I am able to just cut back on expenses and stuff those week to adjust for any loss in income .... this accumulates for time when ratio is low, if I were to get truly sick or as my 'retirement savings'.

    Basically my business budget in a nut shell looks like this
    1 kids weekly fees covers 'daycare food / consumable supplies'
    1 kids weekly fees covers 'business taxes/vacation/sick time/business savings'
    2 kids weekly fees covers 'my portion of household expenses ~ aka my income'
    1 kids weekly fees covers discretionary spending for things in the business (new toys, replacement equipment, renovations and upkeep of the house, field trips, and so forth all those things that are above and beyond the basics that can be temporarily cut back with little over all affect on the program should financial need be .... this is the space I do not NEED to be full all the time that allows me to be flexible in choosing the perfect match verses feeling desperate!
    Children construct their own intelligence. The adult must provide activities and context, but most of all must be able to listen. Children need proof that adults believe in them. Their three great desires are to be listened to, to understand, and to demonstrate that they are exactly what we expect."
    Loris Malaguzzi

  11. #10
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    I think my accountant is ripping me off! Because he told me I will have to pay 3,000 for 2012. He was referred to me by other home care providers. Anyone have any referrals they wouldn't mind giving me please message me. I am in and around the Halton Area. This would be a huge help!

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