Do you keep your receipts?

Think as a business owner you’re immune to an audit by the CRA? Think again!

It used to be that when it came to checking receipts for items like meals and advertising, the CRA generally left business owners alone, but that’s changing. I’m finding that the CRA is going after business owners more frequently and they’re being very particular about receipts, which can end up resulting in businesses having to pay back HST and other deductions claimed in error.

Keep In Mind

Bank statements and credit card statements don’t count as receipts. You may pay for all your gas on your Mastercard, and that statement is a fine place to start as long as you’re saving the actual receipts, even if they’re crumpled up in an envelope. If the CRA audits you, you’ll have to flatten them all out as proof. People tend to get complacent with receipts and start tossing them. If you don’t have the actual receipt, the CRA can deny those deductions and you’ll owe them money.  CRA has their specifics on what constitutes appropriate records here.

If you have any questions about proper record keeping and how to make is easier, or if you’re being audited by the CRA, feel free to give us a call.

Ian Edmonds is a CPA, CA and CPA (NC) working in Toronto with small and medium-sized businesses, individuals, and not-for-profit organizations in Canada and the US to provide personalized, approachable tax and accounting advice and services and help people avoid expensive tax situations.  Contact us now to set up an appointment.