Income Tax for Daycare Providers

With income tax season upon us it may also be a good time for us to evaluate the effectiveness of the record keeping strategies we’ve put into place. This is of particular importance for home-based business owners.

Income Tax for Daycare Providers

Receipts

While the deadline to file income taxes is not until April 30th, child care providers are required to provide receipts to all daycare families no later than February 28th. One receipt must be submitted for each child in a family.

A common question that  is asked at the CCPRN office this time of year is what information should be included on receipts. In addition to the child’s name, his/her parent or guardian, the duration of care  or tax year, and amount received, each receipt should also state the child care provider’s name, address and social insurance number (SIN).

Wondering what expenses to claim as a daycare provider?

Child care providers are entitled to claim expenses that relate strictly to their child care services, such as accounting, legal and other professional fees, advertising costs, entertainment, equipment, groceries, insurance, interest, office expenses, outings, rent, repairs and maintenance, subscriptions, supplies, telephone, training and travel.

In cases where a vehicle is used in a daycare, providers can also claim such expenses as fuel costs, insurance, leasing cost, parking fees, repairs/maintenance, washing, and plating and licensing.

Of course it is easier to keep track of all expenses when personal costs are separated from business fees. If possible, open a separate business bank account and credit card. All records must be kept for 7 years.

If you would like to learn more tips on daycare record keeping and income taxes, there are still  spaces available in our upcoming Income Tax workshops. We’re offering it on 3 different dates with 2 different locations to suit you. Register online at www.ccprn.com

Information above has been provided by Claire at www.scanlaninnovations.com

For further information on income taxes go to: www.cra.gc.ca

 

Signature - Jo

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About CCPRN

Child Care Providers Resource Network *CCPRN* offers training, information, resources and support to those providing child care in a home setting.

Posted on February 27, 2013, in Child Care, daycare, Finance, Finance, Uncategorized and tagged , , , . Bookmark the permalink. 1 Comment.

  1. Child care providers may choose to apply for a “business number” through CRA to protect the security of their SIN. This business number will effectively act as an “alias” for the child care provider’s SIN as CRA will be able to match up the two numbers when processing tax returns. In addition, whilst child care providers must provide receipts by the end of February, they are entitled to the extended tax filing deadline of June 15th as self employed individuals.

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