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7 Things to Know About Childcare Expenses

 
With all of the love and joy that kids bring into our lives, the reality is they also bring more expenses. Luckily, the Canada Revenue Agency (CRA) recognizes this and makes room on your tax return for some childcare expenses. We’ve broken down how to claim these expenses here, so you can take the guesswork out of your childcare costs.
1. Get your receipts together
The first step in making a proper claim is getting a receipt for your childcare expenses from your childcare provider. They must provide you with their Social Insurance Number (SIN) on the receipt, and without this receipt you can’t make a claim.
2. Who makes the claim
Often, the spouse who earns less must claim the childcare expenses on their tax return. The only situations that allow higher-income earning spouses to claim these expenses are when the lower-income spouse is in school, jail or in the hospital. Otherwise, the childcare expenses have to be claimed by the lower-income spouse. Even if the lower income earner doesn’t need the deductions, the expenses cannot be transferred. If you’re a single parent, you’ll be claiming all of your childcare expenses on your return, or deciding with your child’s other parent who will be making the claim.
3. All in the family
If a parent (say your Mom or father-in-law) is caring for your children, you can claim the amount you pay them. However, they have to provide you with a receipt that includes their SIN, and report the money you’ve paid them as income on their return.
4. Minors don’t count
If you pay your 12-year-old to look after their brothers or sisters, this doesn’t count as an eligible childcare expense.
5. Maternity leave income
Childcare expenses can only be claimed against employment income and other earned income. Say you’re on maternity leave and are the lower income earner in your family. Your maternity leave benefits aren’t considered “earned” income by the CRA. Because this income isn’t “earned” in the same way employment income is, you can’t claim childcare expenses against it.
6. Summer camps
If your kids are signed up for camps, you can claim the childcare portion of their fees. Make sure you ask for a detailed receipt, as it’s only the childcare portion of the fees that are eligible.
7. Lunch-time supervision at school
If you’re paying to have your child stay at school to eat lunch, the supervision fees are considered an eligible childcare expense, but make sure you aren’t including the cost of food.




How to Keep a Mileage Log

The Canada Revenue Agency (CRA) state that keeping an accurate logbook for business travel maintained for an entire year is the best evidence you can have to support your motor vehicle expense claims.

The following information should be recorded in the log book each time the vehicle is used for business purposes:
  • the date,
  • the starting point,
  • the destination,
  • the purpose of your trip;
  • the vehicle starting mileage,
  • the vehicle ending mileage,
  • the total miles (or kilometers in Canada) driven.

Automatic Mileage

TrackingManually entering trip information in a log book is tedious, particularly if you make a lot of business trips. Fortunately there are several mileage tracking applications available for Apple and Android smartphones that make use of the phones GPS to keep track of every mile/kilometer driven for business purposes.

For a small monthly fee the app will log your business trip information and enable you to download a mileage summary your tax return. Some of the more popular mileage tracking apps include:
Business Use Versus Personal

The CRA are vigilant about excessive claims for business use of personal vehicles - claiming most or all of your vehicle mileage for business use is a sure way to attract extra scrutiny from the tax authorities and a possible audit.

Therefore when it comes time to claim your motor vehicle business expenses, you will need to know how many non-business related miles or kilometers you drove, and the easiest way to do this is to figure out how many total miles or kilometers you’ve driven over the course of the year by comparing your vehicle’s odometer reading at the end of the tax year to what it was at the beginning of the year.

Then, once you have your data for the year, to calculate your motor vehicle expenses claim you need to tally all the miles/kilometers you’ve driven for business use over the course of the year.

Your personal use is then the total mileage for the year minus the business mileage.


Deductible Business Expenses

Link to CRA for deductible sole proprietorship or partnership business expenses:
http://www.cra-arc.gc.ca/tx/bsnss/tpcs/slprtnr/bsnssxpnss/menu-eng.html

Did you Know?

The Canada Revenue Agency (CRA) has tax credits, deductions, and benefits to help students. All you have to do is file your income tax and benefit return and claim them.

Important Facts Here are the top ways to save at tax time:

  • Claim your eligible tuition fees - An eligible tuition fee is a fee you paid to attend your post-secondary educational institution for the tax year - Please have your form T2202 ready.
  • Claim the interest paid on your student loans – You may be able to claim an amount for the interest paid on your loan for post-secondary education. You can also claim interest paid over the last five years if you haven't already claimed it. Only interest paid on loans received under the Canada Student Loans Act, the Canada Student Financial Assistance Act, or a similar provincial or territorial government law for post-secondary education can be claimed.
  • Claim your eligible moving expenses – If you moved for your post-secondary studies and you are a full-time student, you may be able to claim moving expenses. However, you can only deduct these expenses from the part of your scholarships, fellowships, bursaries, certain prizes, and research grants that is required to be included in your income. If you moved to work, including summer employment, or to run a business, you can also claim moving expenses. However you can only deduct these expenses from the income you earned at the new work location. To qualify, your new home must be at least 40 kilometers closer to your new school or work location.
  • Claim your child care expenses – If you have to pay someone to look after your child so you can go to school or work, you may be able to deduct child care expenses.