Child Care Taxes : Self Review Checklist

Have you performed your own “End of Financial Year Review” on your child care taxes?

There are only a few days left to the end of the financial year and if left too late you could miss out on being able to claim available tax deductions!

What kinds of things can you review yourself:

  1. Have you included all your business expenses in your tax return? Need a list? Get one now!
  2. Don’t forget the cost to run your family day care from home. These include electricity, gas, water, etc. For more information refer to our blog on Running A Family Day Care – Tax Return Deductions.
  3. Get a Summary of Fee Income Earned and administrative fees and other expenses paid to your Family Day Care Scheme. Use this together with your list of family day care expenses to calculate your net income position i.e. income less expenses.
  4. If your net income income position is lower than the tax free threshold of $18,200 you don’t need to worry about paying tax however if you are registered for GST you can still claim the GST paid on the business portion of expenses incurred in running your family day care business.
  5. If your income exceeds your expenses by more than the tax free threshold of $18,200 consider bringing your investments forward into this financial year or prepay some of your expenses.  For more information refer to our blog on “How to get the best results out of your family day care tax return.” You can also get your family day care accountant to work out how much tax you’re likely to pay. If you haven’t started putting money aside to pay your taxes now is the time to start!
  6. Consider how much you will be contributing to Superannuation and ensure that your Superannuation fund receives these monies well before the end of June 2016 as some Superannuation Funds have earlier cut-off dates. Late receipts by your Superannuation Fund will only reflect as a tax deduction in next year’s tax return.
  7. Review your list of assets and if you have not claimed their full cost consider whether they are broken or can still be used. Claim the remaining cost of broken or unusable items immediately. Assets include items which can generally last more than a year such as office equipment, furniture, motor vehicles, toys and resources ,etc.
  8. If you’re claiming for the use of your motor vehicle in your family day care business get your log book information ready for your accountant. For more information refer to our blog on: Claiming Motor Vehicle Expenses.
  9. Give your family day care income and expense list a once over reasonability check using the ATO benchmarks as a guideline. 
  10. If you have not yet registered for GST – this is your chance to do so. Family Day Care Owner’s can claim GST on expenses, but do not have to charge GST on family day care fees earned. This means that you can claim the GST amounts back from the ATO which relate to running your family day care business.

The above are thought provoking suggestions only and should not be construed as advice. Please contact us to discuss your specific circumstances. Please note that deductions on a home could give rise to capital gains tax and therefore these should carefully be considered.

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