Managing the business side of things.

We are just back from meeting with our accountant.  This may sound completely weird, but I LOVE our accountant. He is friendly, helpful, wise, and above all, I trust him and his advice completely!  After working with him for over 3 years, I would like to pass some of his advice about running a business on to you. If you are the kind of person who has, in the past, put all your dayhome business receipts in a shoe box, and then spent HOURS figuring out your expenses and income and taxes come February, this is the year to change. Trust me, a few minutes a month will save you SO much time later down the road.

When running a dayhome, or any home based business, you first of all need to know what expenses you can claim, and how much of each you can claim, too!  For a dayhome, those categories are (but are not limited to)

  • Food
  • Insurance
  • Utilities – a % of your home in which your dayhome is run.
  • Transportation – Mileage, Gas costs, car repairs (a % of your total costs)
  • Equipment purchases – highchairs, cribs
  • Cleaning supplies
  • Toys
  • Art and Craft Supplies
  • Advertising (remember, $5/month to be featured and advertised on social media with us!)
  • Office Supplies – folders, papers, computer software, printer ink, etc.
  • Field trip Costs
  • Cost of any classes or certifications you take related to child care
  • Home improvement and repair
  • Housing costs – the % of your home in which your dayhome is run. 
Make sure you keep receipts for all of the items you have bought. If you have personal and dayhome items on the same receipt, highlight those items that are for the business, and then file the receipt in the appropriate spot (I use file folders, some use envelopes… whatever works for you!).  In order to protect yourself in the event of an audit, ensure you keep all your receipts for at least 3 years. 

For things like utilities, housing costs, home improvement and transportation, you cannot claim all of your personal costs against the dayhome. However, you can claim a portion. For example, our home office is about 8% of our home (roughly), and so 8% of our utilities and home improvement is claimed against the business. If the home improvement costs are SOLEY for the dayhome area, such as re-carpeting your playroom, then you can claim 100% of the costs, but if you replace your roof, then use the same percentage rule as you would for utilities.  For housing costs, we personally charge our business a “rental” fee. For an office, about $50 a month is reasonable, for a basement, I would claim about $200 or $250 as rental.  To get a good ballpark, take the percentage of the space you use from your mortgage or rent, and then use that as your “rental” cost.  For transportation, again, it is a percentage (by kms) of your total cost (or the CRA allowed $/km rate), unless of course you are claiming ETS bus fees for taking 6 kids to the museum (for example), in which case you claim ALL of that.


As is often the case, the Government of Canada has a great website that outlines, in even more detail, what you can and cannot claim. You can check that out at http://www.cra-arc.gc.ca/tx/bsnss/tpcs/dycr/menu-eng.html.  

With all the expenses you can claim, you can actually run your business at a loss, which means you will end up paying no tax on it, so keep good records,  and stay on top of the paperwork. And, if like us, you love your accountant; take him a coffee. He’s working some LONG hours right now :) Have a happy tax season!

**proviso – I am NOT an accountant, so if you have any questions, i can help you out, but an accountant is the official word**

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