Electronic Record Keeping

Yesterday I learned something new, and I want to pass it on to you!

IC05-1 - Electronic Record Keeping

You the taxpayer are responsible for retaining all electronic records in a usuable file for the government. That is a loaded statement. What do I mean by that?

You are responsible - Just in case you have a third party (accountant/bookkeeper, e-commerce, internet service provider, outsource payroll, payables or receivables), you must ensure you have the proper documentation should Revenue Canada ever request a review.

Retaining - You must keep these records in the proper format for 7 years.

Electronic Records - As per Revenue Canada, "An electronic record is any information recorded in an electronically readable format."

Usuable - Excel or PDF. Most programs will transfer their data to an Excel or PDF format, and there are third party outsource services that do this, but only for a certain length of time. It is up to you to ensure that you have saved your data with proper backup.

Talk to your Bookkeeper or Accountant, and ask them to make sure all your documents are stored in the correct format, and the back up is done correctly!

TAX DEADLINES

Well it is that time again! No not the yearly checkup, but as uncomfortable! It does not have to be that way if you just make sure you are doing the following:

1.  Organization - It is a good idea, if you have not already been doing ,so to get your records together, organize by month, and, if you feel so inclined, get them entered into a computerized accounting program or at least an excel spreadsheet.


2.  Save Money - Complete your bank reconciliations, get all of the invoices and returned cheques and staple them to the back of your bank statement. If you do not have an accounting program you can still complete this task. YOUR ACCOUNTANT WILL LOVE YOU!

3.  Don't Throw Anything Out - Keep all receipts, your accountant will instruct you on the receipts that can work as an expense. One good practice is to write on your receipt what the purchase was for or who you took out for that meal.

4.  Business Use of Personal Vehicle - As at January 1, 2009, a mileage log needs to be maintained a minimum of one month out of the year and may be requested by CRA in an audit. You are required to complete a milieage log for one month and then it will be averaged for the year. You must keep this information for SEVEN YEARS! You can also claim the business portion of the following: fuel; leasing or financing costs; repairs and maintenance; license and registration; and parking.

5.  Home Office - Make sure that you gather the following information: rent; mortgage interest -- not the principal portion; property taxes; utilities; telephone; and home insurance.  There are other less obvious expenses you should be claiming -- YOUR ACCOUNTANT WILL TELL YOU!

With all this knowledge you should be able to feel a bit more in control when you set up that meeting with your accountant.

TO YOUR SUCCESS!

THE ACCOUNTESS

Get Ready to File

April 30th is not too far away and most of you, if not all of you, should have received your T4s, T3s, T5s and letters for your RRSP contributions for 2009 and the beginning of 2010.

The employer must mail these documents to the employees no later than the last week in February. If you have not received them you should be contacting your employer to let them know you have not received your T4, or any other T you may be expecting.

Do not ever think that you can submit your taxes without all of your papers accounted for. There is a huge penalty if you undersubmit your taxes, even if you have forgotten about one document.

Contacting your previous employer and letting them know that you have changed your address will help you receive your T4's on time. This can be handled as soon as you know you are changing your address. If you find that you move around a lot, tell them you would be happy to pick it up.

Just remember you have until April 30th, to file your personal taxes, to avoid any late penalties. STAY ORGANIZED AND THAT WILL SAVE YOU MONEY!