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For more information about keeping tax records, click here to learn more! Income Recordsīusiness owners must keep track of all the gross income (total income before deductions, including deductions related to goods sold). Remember, all the types of documents listed below should be kept in an organized manner to make your life and tax season easier!
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If you are unsure what records to keep, the following list provides a brief outline for each category of business document to keep with examples. The CRA also notes that you should not send these records with your tax returns, but instead keep them on file in case of an audit or you are asked to provide them in the future ( source). It is best to keep separate record logs for each business you run to avoid confusion. They also state that business owners should keep an organized, daily log of all income and expenses. What exactly counts as a business document? Which documents should business owners keep and which should you throw away? First of all, the CRA states that “you are required by law to keep records of all your transactions to support your income and expenses” ( source). To be safe, it is often best practice to keep all supporting documents for 7 years to avoid potential problems ( source). However, if you file your tax return late, the six-year period also begins late. – make sure you follow CRA guidelines as opposed to IRS guidelines! According to the CRA, you only need to keep tax records and business documents for 6 years. The amount of time to keep documents for tax records is different in Canada than the U.S. In Canada, the rule of thumb is to keep all important business documents for 6-7 years. How Long To Keep Business Documents – 6-7 Years – Immanuel Greenberg – More testimonials here! Not only would I continue to use Blue-Pencil, My documents were safe andĭisposed of properly. “Blue-Pencil was efficient and professional. Get a quote within 30 minutes for the GTA’s award-winning document storage service. With rising document storage costs, complying with these standards may seem daunting. Avoid surging document storage costs – work with Blue-Pencil today. Keeping business documents such as tax records, pay stubs, and other supporting documents is important. Business owners should hold on to most documents for a period of 6-7 years in compliance with the Canada Revenue Agency (CRA) standards.