New CRA tax laws to peruse and enjoy ;)

[mela]

What does everyone claim for taxes?

Whole home or a designated area??

[Suzie_Homemaker]

What does everyone claim for taxes?

Whole home or a designated area??

You claim what you use. Being the most audited business in the Country, you need your return to be accurate.

There's a CRA guide called "Using your home for day care" which explains the calculation. Realistically, unless you live in a trailer or an apartment, there are going to be rooms in your house you do not use for day care such as certain bedrooms, your ensuite if you have one, any walk in closets. If your daycare is in your basement, you aren't using all of the above rooms. If your day care is on the main level, you aren't using your basement. CRA knows what is typical and will look for anything out of the normal realms.

Once you have figured out what percentage of your homes sq footage you are really using, you will multiply any shared space (used by daycare but also the family outside business hours) by 5 week days over 7 days in a week and again by your business hours over the total of 24 hours in a day.

For instance - if you live in a 2 bed trailer and use every single part of your home during business hours then 100% of your sq footage is used.

100% x (5 days open for business/7 days in a week) x (10 business hours / 24 hours in a day) =
100% x 0.7143 x 0.42 = 30%


If you have 3 levels, and your entire basement is entirely dedicated to day care, you don't have a basement laundry which is used by the family and no one sets foot in the basement for any other purpose than day care, then it's dedicated space so assuming the footprint of your basement is the same as the main and upper level, then it would be one third of your space but for the whole week and for the whole day so 33% can be claimed.