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ranging from parents needing help with their childcare
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Question: Tax
Receipts for Parents
From: Tamika
Comments: I have a new daycare and haven't done any
taxes yet. My parents are already asking for receipts
and I want to give them to then but don't know what
I should write on the receipt. I also need information
on how to do my taxes, like what can I claim. Please
help.
Answer
Tamika, your question is a popular one this time of
year as child care providers across the continent
prepare for the upcoming tax season.
Your
tax receipt to parents could be done on a simple receipt
book you can arches from your favorite stationary
store, or you can use the one we have designed specifically
for child care providers: Year
End Tax Statement
Your
receipt should contain the following information:
- The
complete the name of the parent
- The
number of children you cared for
- The
total child care amount paid during the 2004 tax
year
- Your
name or your business name
- Your
social insurance/security number
- Your
Business Identification Number if you have one
- The
date
- Your
signature
The
tough part is determining exactly what fees the parent
paid you for the year, especially if the child attended
only part time sessions or had irregular hours. Hopefully
you kept some sort of Attendance
Payment Record where you recorded each child's
attendance for each month, along with the amount of
payment the parent made and the date payment was made.
This will make calculating the amount each parent
paid you relatively simple. All you'll need to do
is add up the total month by month.
The
good news is that by preparing your Year
End Tax Statements for your parents, you are calculating
your earnings for the year which you'll need when
you prepare your taxes. Now if you were passionate
about keeping track of your expenses on a monthly
basis using a Monthly
Expense Statement, you're tax preparation will
be a snap.
It
is important to note that canceled checks are not
acceptable by the IRS for receipts.
As
far as doing your taxes, you'll want to do some very
basic things during the year (starting Jan 1st) that
will make handling your taxes so much easier. These
include:
- Keeping
good expense records. Save all receipts for all
expenses associated with your business, including
all food receipts for your business and your family.
Use these receipts to track the the number of all
meals you serve the children even if this does not
include the meals paid for by the Food Program.
- Keep
track of all the hours you use your home to run
your business. Don't forget to include prep time,
cleaning time, dealing with parents after hours,
etc. It all adds up and can be used to increase
your business use of home deduction.
- Keep
receipts for everything. If the item you bought
is not printed on the receipt such as is the case
with dollar store receipts, etc., make sure you
write a note on the receipt for everything it covered.
After all, you are entitled to deduct ALL expenses
that are necessary and ordinarily used for your
business. Included in these list would be items
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