New here & a question

[2angels]

Hi everyone,

I have been reading the forum and I'm so glad I found it! I will be starting my daycare early next year, currently working full time. It's going to be a big change for me as I've been working for a corporation for the past 10 years! I decided I want to be home for my kids and operating a daycare is my next best source of income.

Quick question - although my daycare is starting next year, I'm already purchasing things this year (large items like storage, small items like books, toys, etc). If I understand correctly, I should be able to expense these items against my income this year right? I would just claim 0 for self employment income? Also, with regards to equipment and capital cost allowance, I understand furniture is in this category. What about things like high chairs, play pens, strollers? Do we treat these as equipment where we write off 20% every year, or are these expenses? Does it matter if they are bought new or used? Sorry, I guess it wasn't a quick question after all!

[playfelt]

Technically anything that is designed to last a number of years is considered equipment and would be your furniture, etc. and should be your highchairs and playpens too. Things that you are buying now will be claimed against your income for next year because you haven't earned any daycare income to claim it against. So keep the receipts even those dated 2011 and put them with your 2012 receipts. In essence what you are buying now belongs to you not your business. Come January when you start doing daycare it will be like selling the items from yourself to your daycare using the paid receipts. The amounts will then be claimed against income earned in 2012. If you buy things used make sure you get the seller to sign something saying how much you paid or immediately write yourself a note saying what you bought, where and for how much. Yes you can claim the purchase of a used item.

[2angels]

Thanks, playfelt! What about courses/training? If I enroll now and pay for it this year, how do I claim this against income?

[playfelt]

Not sure on courses/training how you would claim that or if you can. If you call revenue canada you could ask questions like that. Do share the answer when you get it as I'm sure others down the road would like to know the answer too.

[VictoriaChildCare]

yes 2angels you can claim all courses, training and such at 100%. Check the DNA under education. When I was licensed we used to travel all over Ontario for the annual Home Child Care Conferences and I was even able to write off 50% of my meals. Keep all of your receipts. I even keep the receipts for my own child's toys, when they end up mine in the daycare I sell it to myself. Anything for the daycare is an expense. I think of it as a separate entity - if it goes in the playroom it's 100%

[VictoriaChildCare]

Here you go ladies, a full listing http://www.cra-arc.gc.ca/tx/bsnss/tpcs/dycr/xpns/menu-eng.html

"Training costs are not deductible as current expenses if they are capital expenditures. They are considered to be capital in nature where the training results in a lasting benefit to the taxpayer, i.e., where a new skill or qualification is acquired. Where, on the other hand, the training is taken merely to maintain, update or upgrade an already existing skill or qualification, the related costs are not considered to be capital in nature."

so you can write off a conference but not taking your ECE at university