It’s essential for taxpayers to keep accurate records and supporting documents to substantiate the information reported on their tax returns. Keeping organized records helps taxpayers comply with tax regulations, substantiate deductions and credits claimed, and respond to inquiries or audits from the Canada Revenue Agency (CRA). Here are some key supporting documents that individuals and businesses should keep:
For Individuals:
- T4 Slips: These forms report employment income, deductions, and taxes withheld by employers.
- T4A Slips: Used to report pension, retirement, annuity, and other income.
- T5 Slips: Reports investment income, such as dividends, interest, and mutual fund distributions.
Receipts for Deductions: Keep receipts for deductible expenses, such as:
- Medical expenses not covered by insurance
- Charitable donations
- Union dues
- Employment expenses (e.g., work-related travel, supplies, and equipment)
- Moving expenses (if eligible)
Receipts for Credits: Keep receipts for eligible tax credits, such as:
- Tuition fees and education expenses
- Public transit passes
- Children’s fitness and arts programs
- Home renovation expenses for accessibility (if eligible)
Receipts for RRSP Contributions: Keep receipts for contributions made to Registered Retirement Savings Plans (RRSPs) for deduction purposes.
Capital Asset Records: Keep records of the purchase price, sale price, and any expenses related to capital assets, such as real estate, stocks, or other investments.
Records of Income and Expenses for Self-Employment: If self-employed, keep detailed records of income, expenses, invoices, and receipts.
For Businesses:
Financial Statements: Maintain records of income statements, balance sheets, and cash flow statements.
Invoices and Receipts: Keep invoices and receipts for all business-related expenses, including:
- Rent or lease payments
- Utilities
- Office supplies
- Salaries and wages
- Insurance premiums
- Repairs and maintenance
- Travel expenses
- Vehicle expenses
Bank Statements and Cheque Registers: Keep copies of bank statements and cheque registers to track business transactions.
Purchase and Sales Records: Maintain records of inventory purchases, sales invoices, and sales receipts.
Payroll Records: Keep records of employee wages, payroll deductions, and remittances to the CRA.
Asset Records: Maintain records of business assets, including purchases, depreciation, and disposals.
Tax Returns and Notices of Assessment: Keep copies of filed tax returns and notices of assessment for reference and verification.
It’s important to keep these records and supporting documents for at least six years from the end of the tax year to which they relate, as the CRA may request them for review or audit purposes. Organizing and storing records electronically or in a secure physical location can help ensure they are readily accessible when needed. Additionally, consulting with a tax professional or accountant can provide guidance on record-keeping best practices and ensure compliance with tax regulations.
Tags: Supporting Documents
