Quote Originally Posted by Sam04171990 View Post
Hi all,
I'm just starting out in the unlicensed home daycare field and wanted to register a business name so I won't have to use my sin # on receipts, but how does this work when it comes to doing my taxes?
Business names are registered on a Provincial level so the process and costs to have a business name and a BIN # vary slightly across the country.

In terms of doing your taxes, it's exactly the same as it would be if you didn't have a business name, however, there is the requirement to submit your annual accounts to your provincial stock registry. I would seek out a local book-keeper who is open to sharing information with you. That's always wise anyway in the first couple of years in business while you get familiar with what you can claim, and make sure you are saving the receipts for those costs but it's also good to know anyway so you can decide if you are going to stay with a book keeper or take this on yourself.

But essentially yes, it's the exact same process in terms of tax returns. Except your business name will show under one of the income sources instead of your own name. Much like if you had an employer over the year, you would have T4 entries on your taxes detailing your employer, your business name will be entered as if it were an employers name.

Would it be the same process as if I used my own name or is it different at all?
No difference for tax returns - as said - just additional information to be submitted to the business registry for your province showing your annual business accounts.

Also if I have a business name and use my bin number would I have to open a business bank account?
Not necessarily but it might be easier if you did. Your business accounts have to be submitted annually to stock registry and those will be easier to produce if your business income and transactions are in an account away from your personal finances. It doesn't have to be a business account but I would strongly suggest it should be a different account.

Home based businesses are highly audited in Canada with home based child care being the most audited business. CRA will audit ALL of your household accounts if you get audited. They will check to see if your income has been declared in full, if your bills are all coming from your income, if there's a deficit of income, they would expect to see that debt showing up and if there's an excess of income vs outgoings, then of course your spending + bills shouldn't be greater than you have coming in.

i.e.

Daycare income for Jan = (from deposits and verified by contracts) $5,000
Day care Costs for Jan (with receipts) $2,000
Means $3,000 profit/your gross personal income.

Car loan, Mortgage, Power, Heat, Water, Day care insurance, house insurance, car insurance, cable/TV/Internet, cellphone, fuel for car, car insurance, etc = $2,500

Leaves $500. If you have made a deposit into TFSA or RSP's, of $1000, then they know you spent more you said you have coming in or have inflated business expenses to show more cost than you really had. Likewise, when they look at your banking accounts, if you have had meals out, a vacation, bought a new appliance, been to the movies, they also know there's unaccounted money coming from somewhere. If you are single, then they know something is amiss but if you have a spouse, then they might be paying some of these costs and so they will of course audit his accounts too.

And can independent childcare providers use the word daycare in their business name? I'm located in Ontario if that helps.
That varies province to province because the day care legislation is set at a Provincial level. In my province we cannot use a whole list of words unless we are licensed. "Family day home" or "home day care" is reserved for agency homes. "Day care" is reserved for licensed centers. We cannot use "establishment" as that is deemed to suggest a center. Our regulations say we cannot advertise in a manner that implies we are licensed and there's a whole list of words they deem are suggestive of that. You need to check with your licensing department as to what your province views as off limits for day homes.