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  1. #1
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    Sep 2007
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    Default Home Daycare Income Tax Question

    Oh man I need help!!

    I moved to BC from Ontario and did home daycare from Jan-October 31st...

    I need help what can I claim how much of things, is there a list somewhere? please someone help me!

    How much Hydro? How much for food, I was told $4-$5 a day per child?
    What percentage of everything else....

  2. #2
    Expert Forum User
    strongmommy's Avatar
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    Sep 2006
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    Hi Denise ...

    Here is a link to CRA's website that deals specifically with home day care businesses and what you can generally include as an expense:

    Day care in your home

    You'll use an Ontario tax package (since you lived in Ontario as of December 31st) and you'll enter your day care information on form 2125 (business and professional income). Here's a link to the specific form:

    I won't list all of the items you may deduct (because it's too huge and every situation is so unique). What I will say is that you can claim only those allowable expenses you actually paid for - there is generally no minimium or maximum allowable amounts for things under the actual income tax act. You don't need to submit receipts with your return but you do need to prove the expenses if CRA asks for them.

    Having said all that, CRA does let you make some assumptions where tracking the actual cost would be time prohibitive - for things like food per child, if you have your receipts and can make a reasonable estimate of say $4 to $5 per day then use that amount. If you spent more than that because you have children with unique food needs then claim the higher amount.

    For things like the portion of "home" expenses - there is a section at the bottom of the form 2125 ('calculation of business-use-of-home expenses) where you fill in the total amounts you spent on each item and then take the appropriate percentage that relates to your home day care. What they're really asking for is the portion of these costs you spent only on your home day care. Often people will take 10 - 20% because they're using one room out of say six rooms in their house for the daycare needs. CRA won't be coming to your house to measure square footage or anything but they won't consider it a reasonable expense if you claim an amount that seems too high. Using the kitchen to cook meals for the daycare doesn't count for much - the purpose of having a kitchen is for personal use and you can't claim anything that relates to personal use.

    Work through the forms and if you have anything specific you're not sure of feel free to post again --

    Hope this helps get you started

  3. #3
    Junior Member
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    Sep 2007
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    thanks so much!

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