Daycare in your home
The CRA provides a checklist that communicates some of the key tax topics that should be taken into consideration by self-employed individuals and small business owners.
If you are thinking of setting up a daycare business, you should also know about municipal, provincial, territorial, and federal laws and regulations that could affect you. You can get some of the information you should know from municipal offices, provincial or territorial ministries, as well as applicable Government of Canada departments and agencies. Also, local chambers of commerce or boards of trade will often offer help to new businesses.
- Reporting your income
Determining your fiscal period. Using the accrual method of accounting.
What expenses you can deduct and how you can deduct them.
How to determine if you are an employee or self-employed.
- Issuing receipts
When and how you should issue receipts.
- Your employees
Contributions and premiums you are responsible to deduct, remit and report.
- Keeping daycare records
How to keep your business records, retention and early destruction of records for daycare
- Making payments for individuals
As a self-employed person, you may have to pay your income tax by instalments.
- Goods and services tax/harmonized sales tax (GST/HST) for daycare
Most home daycare services are exempt from GST/HST.
Forms and publications
- Guide RC4110, Employee or Self-employed?
- Guide RC4409, Keeping Records
- Guide T4002, Business and Professional Income
- Booklet P134, Using your Home for Daycare
- Form T2125, Statement of Business or Professional Activities
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