How long do i keep payroll records

how long do i keep payroll records

How Long Do I Have To Keep My Income Tax Records

Okay, now that I have kept you in suspense, here is he answer. The CRA says “As a general rule, you must keep all of the records and supporting documents that are required to determine your tax obligations and entitlements for a period of six years from the end of the last tax year to which they relate. The six-year retention period under the Income Tax Act begins at the end of the tax year to which the records relate.” Thus, in many cases you are actually keeping your records almost seven years.

The fact that you must maintain your records for at least six years does not mean you will be audited for 6 years at a time. Typically you are barred from being reassessed by CRA three years from the mailing date of your Notice of Assessment assuming there is no tax evasion and loss years are not still open.

A word of caution, ensure you keep your source documents, they are a key to satisfying many an auditor.

Where you are an individual and do not carry on a business, CRA says on their website you still are subject to the six year retention period. They have also said the following in respect of electronic tax return filings:

"Canadians who file their income tax and benefit returns electronically, or who do not file information slips and receipts with their paper-filed returns, should keep their tax records on hand in case they are contacted by the Canada Revenue Agency (CRA).

After returns are filed, the CRA verifies the income reported, as well as the credits and deductions claimed. For the 2008 tax year, about 2.4 million individual returns were reviewed.

Some of the first reviews of deductions and credits are done when the returns are filed, and before taxpayers

receive their notices of assessment. However, most reviews take place later in the year, as the CRA works to verify the information on an individual's return and compares it with the information provided by other parties, such as employers, spouses, or common-law partners.

During this review process, the CRA may contact taxpayers to ask for more information on income sources or dependants. We may also request copies of receipts or information slips to support claims related to:

  • medical expenses;
  • charitable donations;
  • child care expenses;
  • spousal or child support payments;
  • moving expenses;
  • the home renovation tax credit; or
  • registered retirement savings plan contributions.
In addition, the CRA may ask you to support your claim by providing proof of payment in the form of cancelled cheques, bank statements, or other documentation. Keeping your records on hand makes it easier to respond to these requests. It will also help you explain your tax and benefit situation to the CRA if you do not agree with your assessment or reassessment."

The Family Meeting- Watch Out for the Outlaws

In the last few weeks, many people have opined on my blogs, One Big Happy Family-Until We Discuss the Will and Intergenerational Communication Gap. They have stated that they think it is a great idea to discuss the will and to open family communications about money in some circumstances. However, I have been told that one thing I failed to consider was the interference factor by the “out-laws” or in-laws to some. I have been told that even where a family can have a civil meeting, the in-laws can then interfere by getting involved with their child and then ultimately the son or daughter of the parents that held the meeting become involved at the urging of their spouse via the in-laws and the whole thing unravels. Interesting observation.

Source: www.thebluntbeancounter.com

Category: Bank

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