The next tax year is right around the corner. If don’t have a system in place for filing your receipts and statements you should start gathering everything up now. A lot of receipts can be lost or misplaced during the holidays and if they are needed for tax purposes you are creating a more difficult and time consuming tax file for your accountant. Even if you choose not to do any bookkeeping or sorting, simply keeping all your receipts and statements in one place will save bookkeeping and accounting fees. Remember that all the support you keep works in your favor in the event of a CRA audit. The CRA will allow you to be more aggressive with your deductions if you have all the required support to back them up.
Also, don’t forget that if you are claiming GST/HST input tax credits (ITC’s), it’s vital to have your till receipts, not just a VISA/Debit slip, credit card statement or bank statement. A proper till receipt will show the product or service provided, the actual amount of GST/HST charged, and the business’ GST/HST registration number. If you are unsure if a business is properly registered to collect GST/HST, you can visit the CRA website at www.cra-arc.gc.ca and confirm their business number. It’s important you verify registrations with subcontractors and contractors as some may inadvertently be collecting and the CRA will disallow the ITC on an invalid GST/HST accounts.
Solomon Nordine is the owner and president of Complete Accounting Solutions. Mr. Nordine is a Fellow Public Business Accountant (FPBA) and a United States Accountant.