Quote Originally Posted by bright sparks View Post
....The maximum guideline per child per day for 2 snacks and 1 meal is $10.....The same with km, gas, general maintenance of your car. There is a maximum amount per km that you can claim for this. Let me know where you are and if its feasible I will forward the accountants info on to you.
Hmmm - I have read just about every article put out my Revenue Canada for using your business for home childcare and have never come across a 'cap' on how much you can claim for food or vehicle expenses .... it just says you can write off any 'reasonable expense incurred through operation of your business'?

While I agree that being too aggressive with write offs can get you red flagged for an audit - if you are truly spending $15 a day per child on food for example - write it ALL OFF and keep your documentation for proof why should you suck up the cost of that and pay taxes on something you should not have to? My understanding is that the only thing with caps are your capital cost allowances for major purchases and there are tables for figuring that out provided?

So with food you have to have the receipts and documentation to back up your expenses as 'reasonable' you cannot just say I spent $8 a day per child ... cause if you are claiming that much in groceries you better have receipts that show you spent $200 a week on groceries PLUS receipts for your own family in addition to that to show them you fed your own family separate from that.

Plus my understanding is that your vehicle expenses are determined by adding up all the cost of your vehicle that year from the gas used, insurance, repairs and maintenance, registration and renewal of your plates and so forth and than determining that your business use was over your personal use by logging your trips for business to track your KM .... so one year if I had 'no' maintenance on my vehicle my write off might only be small but the next year if I had to do $8000 in repairs on it my write off would be that much higher?

Also my advice of the day - while accountants are helpful you still need to know the rules yourself cause if your accoutant graduated at the BOTTOM of their class in school that means there is 40% of the information out there they did not retain - and if if pertains to your business you can find yourself audited and it is YOU who has to pay the back taxes and so forth not the accountant

For example I have peers whose accountants tell them they can write off 50% and up of their shared expenses of their home .... however if you use the CRA's equation for our industry to determine your shared expenses that would mean that you are using 100% of your square footage of your home for business, it would mean you are open at least 12 hours a day and that you are working 365 days a year ... because that is how our equation works and the only way you can get as high as 50% .... if you are writing off MORE than 50% that would mean you are working more than 12 hours a day everyday and so forth?

However most accountants are use to figuring out 'dedicated to business space' .... like a hairdressor or home spa or mechanic with a home garage where the space is NEVER used for personal family use and they just use the square footage of the house over square footage used and stop there - which is not correct for us and if audited you are going to be owning a lot of back tax cause shared expenses add up ... that is your mortgage interest, property tax, gas, hydro, sewage and so forth which is a large chunk of our write offs!

For shared space equations for home childcare it is

(the square footage used for business divided by the square footage of your total home) x (number of hours open for business divided by 24 hours in a day) x ( number of days business is run / 365) = % of business use