I'm just starting out in the unlicensed home daycare field and wanted to register a business name so I won't have to use my sin # on receipts, but how does this work when it comes to doing my taxes? Would it be the same process as if I used my own name or is it differant at all? Also if I have a business name and use my bin number would I have to open a business bank account? And can independent childcare providers use the word daycare in their business name? I'm located in Ontario if that helps.
Hi I have been a provider for almost 20 years now and never had a problem giving my SIN number in my receipts. At the beginning I was also considering to open it as an independent business but, talking to my accountant I decided to not go for it. Basically, I had to create as a separate business a separate bank acc. And create a separate billing ex. Groceries and other items, etc. She recommended to do an internal acc tracking for my business and just run my business as part of my house expenses Wich would have an percentage assigned (ex. 30% house use 50 or 70% groceries and materials and so on) it just made sense at that time (because I was planning just to test it for two to three years and then decide if this field was for me). Anyway almost 20 years later I'm here and I have not have the chance to review or look into changing as a separate business, and also my acc. Said if I decided to close (as separate business ) it also takes a process. So, I decided just to take the easy way.
The use if the term "daycare" is fine, "centre" is not (obviously for misleading reasons). You can be more especific and use; homedaycare, childcare etc.
You can find this explained in the new Cceya doc. All regulations etc. Google it.
Also as private provider the new regulations asks for your contracts to have a paragraph that explains to parents that your house or services are provided as "unlicensed". And this is mandatory. I'll find my paper work and post it. Many new parents have turned down our services by reading and being asked to sign this, we're hoping it all changes with the new elections.
Anyway, good luck and let us know if you have more questions. Hopefully someone with more expertise in the "separate business subject" also answers.
I have an Ontario Business License (business number).
Not sure about your tax question as I have a tax lady who does it for me.
No you don't need a business bank account, when you have a business number. You don't even need a separate account or do separated billing.
I use my business number on my receipts. I also have a line on them that states: •	Providers SIN number will be provided to Canada Revenue upon request, by Canada Revenue.
Here you have, more inf. To include in your contract.
With specific exceptions, all providers, both licensed and unlicensed, are required to allow parental access to the premises and their child.
I'm just starting out in the unlicensed home daycare field and wanted to register a business name so I won't have to use my sin # on receipts, but how does this work when it comes to doing my taxes?
Business names are registered on a Provincial level so the process and costs to have a business name and a BIN # vary slightly across the country.
In terms of doing your taxes, it's exactly the same as it would be if you didn't have a business name, however, there is the requirement to submit your annual accounts to your provincial stock registry. I would seek out a local book-keeper who is open to sharing information with you. That's always wise anyway in the first couple of years in business while you get familiar with what you can claim, and make sure you are saving the receipts for those costs but it's also good to know anyway so you can decide if you are going to stay with a book keeper or take this on yourself.
But essentially yes, it's the exact same process in terms of tax returns. Except your business name will show under one of the income sources instead of your own name. Much like if you had an employer over the year, you would have T4 entries on your taxes detailing your employer, your business name will be entered as if it were an employers name.
Would it be the same process as if I used my own name or is it different at all?
No difference for tax returns - as said - just additional information to be submitted to the business registry for your province showing your annual business accounts.
Also if I have a business name and use my bin number would I have to open a business bank account?
Not necessarily but it might be easier if you did. Your business accounts have to be submitted annually to stock registry and those will be easier to produce if your business income and transactions are in an account away from your personal finances. It doesn't have to be a business account but I would strongly suggest it should be a different account.
Home based businesses are highly audited in Canada with home based child care being the most audited business. CRA will audit ALL of your household accounts if you get audited. They will check to see if your income has been declared in full, if your bills are all coming from your income, if there's a deficit of income, they would expect to see that debt showing up and if there's an excess of income vs outgoings, then of course your spending + bills shouldn't be greater than you have coming in.
Means $3,000 profit/your gross personal income.
Leaves $500. If you have made a deposit into TFSA or RSP's, of $1000, then they know you spent more you said you have coming in or have inflated business expenses to show more cost than you really had. Likewise, when they look at your banking accounts, if you have had meals out, a vacation, bought a new appliance, been to the movies, they also know there's unaccounted money coming from somewhere. If you are single, then they know something is amiss but if you have a spouse, then they might be paying some of these costs and so they will of course audit his accounts too.
And can independent childcare providers use the word daycare in their business name? I'm located in Ontario if that helps.
That varies province to province because the day care legislation is set at a Provincial level. In my province we cannot use a whole list of words unless we are licensed. "Family day home" or "home day care" is reserved for agency homes. "Day care" is reserved for licensed centers. We cannot use "establishment" as that is deemed to suggest a center. Our regulations say we cannot advertise in a manner that implies we are licensed and there's a whole list of words they deem are suggestive of that. You need to check with your licensing department as to what your province views as off limits for day homes.
Registering Daycare as a Business?