An inevitable part of getting your taxes done smart is organization – particularly of your receipts and other expenses. The CRA might ask for further clarification when it comes to assessing your tax return, and it’s always a good idea to have a record of everything you’ve claimed, as evidence of the actual expense incurred and the method of payment.
Tax season might be over, but it’s never too soon to start planning for next year’s return. We’ve put together some helpful tips to get you started and nail down the organization part of your expenses.
It’s easy to turn something a habit, and the same goes for your organizing your receipts. It also helps to know what kind of information the CRA will be looking for if you are ever asked to present records of your expenses.
For general costs that you are claiming as expenses – such as gas, rent, utilities, and others – you should keep original receipts that clearly show the number and item description. Now you don’t have to hold on to the physical printout, as the CRA will also accept a digital copy of the same.
For other claims such as donations, the official receipts have more requirements, including the registration number, the address, and the name of the charity, along with the date of donation and an authorized signature. Also, the value of the donation must be included, and details of any advantages, such as gifts received in exchange for the donation.
If you have a receipt for a non-cash gift, then your receipt should contain details such as a description of the gift, and if the gift was appraised, the name and address of the appraiser.
For some, a shoebox works like a charm, while others might require something with a bit more function and flexibility. Going digital is popular option with the wide range of cloud storage options available, making the entire process as simple as taking a photo with your phone and tapping a few buttons to store your receipt safely. Most smartphone operating systems even come with a built-in app as part of the software, and with incredible camera quality on devices these days, it’s easier than ever to scan and store your receipts online.
Which Receipts You Should Keep
Generally speaking, storing receipts gives you peace of mind, especially if they are related to medical expenses, warranties, or major purchases. For tax return purposes, use the following list as a guide to knowing which ones you should hold on to:
- Transit Pass Receipts
- Interest Paid on Student Loans
- RRSP Contribution Slips
- Moving Expenses
- Charitable Donation Receipts
- Political Donations Receipts
- Rent/Property Tax Receipts
- Medical Expenses
- Children’s Fitness Receipts
- Children’s Art Receipts
- Adoption Expenses
- Child Support Receipts
- Alimony Payments
- Attendant Expenses for Disabled Persons
- Support for a Child, Spouse, or Common-Law Partner
- Office-in-Home Expenses
- Tool Expenses (for trade-persons)
- Exams for Professional Certifications
- Professional or Union Dues
- Carrying Charges and Interest Expenses
Staying on top of your tax return starts with good organization. Get into the habit of your storing your receipts properly and you’ll be ahead of the game come next tax year.