Do you secretly worry that if you put your winter clothes away, it’ll snow? Or that throwing away the receipt for an appliance will cause it to start malfunctioning?
This is exactly the kind of magic thinking that exists around old tax returns: the fear that if you toss them, you’ll need them. While it may be comforting to hang on to tax records until your file cabinet groans under the weight of decades-old returns and receipts, it really isn’t necessary.
Here’s everything you need to know about why you have to hang onto your tax records — and when and how you can get rid of them without anxiety or regret.
- Save your tax returns and any supporting documents for six years.
- One of the reasons to keep income tax records is to provide the CRA with the required information in case you’re selected for a review.
- Written permission is required to destroy tax records before the end of the six year period.
How long should I hang onto my old tax returns?
Contrary to the stuff of nightmares, there’s only so far the Canada Revenue Agency (CRA) can dig into your tax history – six years to be exact. This is the length of time you’re legally required to hold onto old tax returns and supporting documents.
The six-year period starts at the end of the tax year to which the records relate. For example, a 2021 return and its supporting documents are safe to destroy at the end of 2027.
If for whatever reason, you wish to destroy your tax records before the six year period is up – say you’re moving to Fiji and want to travel light – you’ll have to get written permission from the CRA first.
What do income tax records include?
Even if you weren’t required to attach information slips, receipts, and expenses at the time you filed or e-filed, they’re an essential part of your tax record. In addition to your tax returns, here’s a laundry list of the supporting documents you’ll need to produce if the CRA comes calling. Be sure to hang onto every scrap that applies.
Why do I need to keep my income tax records?
You need to hang on to your old tax records for the simple reason that the CRA may want to review them.
If this is the case, they’ll send a request for information that asks you for your supporting documents. What happens next is simple, and not scary. All the CRA will do is cross-reference these docs with the information you provided on your tax return. Think of it as a spot check to ensure your reporting is accurate.
If, in the highly unlikely event the CRA wants to audit you, your old tax records will also play a starring role. And again, having them all in one place will make the process so much smoother and less stressful.
Can I get rid of my income tax records after six years?
If you’re certain you don’t need your records for anything else after the six year period has passed, by all means, get rid of them — but do it carefully. Resist the temptation to toss everything in the recycling bin and be on your merry way. Your records contain a lot of personal data that identity thieves would love to get their hands on such as your SIN and employment information.
To properly dispose of paper tax records, shredding is probably your best bet. If you file electronically and decide to keep digital copies of your tax records, be sure your computer is password protected.
After all, having your personal information compromised is way more stressful and inconvenient than being asked to hang onto your old tax records.
Get the tax support you deserve.
No matter why the CRA is asking to see your income tax records, TurboTax has your back. Our tax experts can answer all your questions and even handle the CRA on your behalf if you get audited.