One of the most frequently asked questions we get is, "How long do I have to keep my business receipts?" Well the short answer is 6 years.
Not keeping your receipts is the leading reason why people end up paying more tax then required. Keeping lousy records only hurts your business net income. Taming that paper pile is difficult but a necessary evil. Your tax organization and preparation will not only keep you audit proof but will also put you in the driver seat on cost control.
Save all the receipts and records associated to the business. The CRA require source documents (your receipts) to be available if they ever come to audit. You only need to keep the relevant receipts and can throw the other unnecessary paper. If you like to keep it old school we recommend picking up a file accordion at Staples or any office supply store. If your feeling Techy Evernote or Genius scanner smartphone apps do a great job. Label each section by expense category such as donations, office supplies, repairs, auto-gas, parking, advertising etc. As you go out during the year keep filing all these receipts away.
When it comes time to filing your taxes simply add all your receipts in Excel or a simple calculator ensuring you are taking calculating that sneaky HST tax. All these summary numbers get reported on the tax return schedules such as statement of real estate rentals, capital gains and losses, GIFI statements and statement of business activities.
At Capex we want to make record keeping as easy and simple as possible allowing you to focus on growing your business. We digitize your box of receipts by scanning and filing all your receipts and get your accounting/bookkeeping done at the same time. This service is quite popular amongst our clients as they love their accounting to be on cruise control.
Click on the link below to book a meeting.
- Written by: Jag Bath