Tax Planning Tips: What Receipts Should I Keep?Brian Jang ON November 20, 2017
When someone mentions tax planning time, it often calls to mind the vision of someone preparing their return, with papers and receipts scattered all about, while fingers fly over the numbers on a calculator. Many of us think of this time of year as stressful and disorganized, but there is no reason for it to be so. All it takes is a little bit of planning and organization.
Over the course of the year, you will likely be presented with numerous receipts for your many expenditures, but which records should you keep?
Originals or Copies?
Certain types of receipts may have different requirements, with some being accepted only if they are the original copies. For example, receipts for your utilities, gas, and rent should be the originals, which should show the proper description and information about the items. Digital copies will be accepted by the CRA.
Donations have somewhat different requirements. For these, you should provide official receipts that include the name and address of the charity, as well as their registration number, and an authorized signature. The receipt should also indicate the value of your donation and any thank-you gifts that you may have received in return.
Any receipts for non-cash gifts should be made out to show the details of the gift, including its description. If the gift has been appraised, the receipt should contain the name and address of the appraiser.
Develop Good Tax Planning Habits
While it is certainly easier to stuff everything into a box or folder marked “Receipts,” you should try to develop the habit of storing things efficiently. Your idea of “efficient” may be unique to you, and that is fine as long as you have a system that you follow for properly filing everything. Storing your records in such a way that you can’t find them when you need them does you little good and results in frustration.
Digital storage has become popular. It can be quick and easy, using images captured via smartphone and stored in appropriate apps or cloud storage.
Whatever method you use, consistency is key as it allows you to know where to find everything you need when the tax planning time comes.
What Do You Need to Keep?
Here is a list of items for which you shoul>d be hanging onto your receipts:
- Student loan interest payments
- Transit passes
- RRSP contribution slips
- Moving expenses
- Charitable donations
- Political donations
- Rent/property taxes
- Medical expenses
- Children’s fitness programs
- Children’s art programs
- Expenses incurred during adoption
- Child support payments
- Alimony payments
- Attendant expenses for disabled persons
- Support payments for a child, spouse, or common-law partner
- Expenses for in-home offices
- Tool expenses (for trade-persons)
- Professional certification exam fees
- Professional or union dues
- Carrying charges and interest expenses
A properly kept and maintained file of all your receipts will help you feel more organized when tax planning time rolls around. It certainly beats digging through multiple shoe boxes stuffed with a mix of important and irrelevant receipts. A little bit of planning can go a long way toward making your returns less… taxing.
To help you make sense of your receipts, contact BCJ Group, Chartered Professional Accountants today!