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January 2012

Record Keeping for Canadians

By Blog, Business Organizing No Comments
record keeping

The Storage Room Before

Do you know what your retention policies are for documents and electronic files for your business?  Knowing what you are required to keep for income tax purposes is critical to your records management system for your business.

One of the main reasons people keep all their papers and electronic files is they are not sure what the CRA policy is or their own company policy is on recording keeping.  Canada Revenue Agency has specific guidelines for what records you need to keep for tax purposes.  Canada Revenue Agency has a record keeping document that I recommend you read for your own peace of mind and to determine your business retention policies at http://www.cra-arc.gc.ca/E/pub/tg/rc4409/rc4409-11e.pdf.

This document (in part) covers recording keeping matters such as:

Why you should keep complete and organized records:

  • Requirements for records
  • Your responsibilities for record keeping
  • Where to keep your records
  • How long do you need to keep your records
  • Destroying records early
  • Keeping Electronic Records
  • E-commerce
  • Requirements for electronic record keeping including:
    • Doing business on the Internet
    • Backing up electronic files
    • Managing electronic records and images
    • Where to keep your electronic records
    • Payroll Records
    • GST/HST
  • and other important information

Make sure you bookmark this page for CRA http://www.cra-arc.gc.ca

How long to keep your records

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 ITA begins at the end of the tax year to which the records relate. The tax year is the fiscal period for corporations and the calendar year for all other taxpayers. The rules are similar for GST/HST under the ETA, as well as for the EIA, the CPP, the EA 2001, and the ATSCA.

Records and supporting documents concerning long-term acquisitions and disposal of property, the share registry, and other historical information that would have an impact upon sale or liquidation or wind-up of the business must be kept indefinitely.

Note: The CRA may specifically require you to keep records for an additional period of time. If this is the case, you will receive details by registered letter or by a demand served personally by CRA officials.

The following are special situations:

  • If you file an income tax return late, keep your records for six years from the date you file the return.
  • Keep all your records necessary for dealing with a notice of objection or appeal until the notice of objection or appeal is disposed of and the time for filing any further appeal has expired, or until the six-year period mentioned above has expired, whichever is later.
  • When a non-incorporated business or other organization ends, the records have to be kept for six years from the end of the tax year in which it ceased to exist.
  • When a corporation is dissolved, the following records have to be kept for two years after the date of dissolution:
  • All records and supporting documents to verify the tax obligations and entitlements;
  • All the additional records that corporations have to keep, as listed above.
  • When a corporation amalgamates or merges, business records must be retained as if the new corporation is a continuation of each of the original corporations.
  • The legal representative of a deceased taxpayer or trust can destroy the records after receiving a clearance certificate(s) to distribute any property under his/her control.

Note: To request a clearance certificate, complete Form TX19, Asking for a Clearance Certificate, and send it to your tax services office.

Electronic record keeping

Keeping electronic records means using electronic business systems to create, process, store, maintain, and provide access to the financial records of a person.

These systems include, but are not limited to:

  • Custom and commercial accounting software;
  • Point of sale systems;
  • Internet based electronic commerce (e-commerce) systems;
  • Electronic purchasing and restocking systems; and
  • Income tax and GST/HST returns preparation software.

Doing business on the Internet

If you use the Internet to carry on your business, your requirements and responsibilities are the same as those of regular businesses or other organizations as listed in Chapters 1 and 2 of the CRA document.  In addition, you are responsible for retaining additional information generated by Internet-based transactions. This information forms an important part of the audit trail and is relevant for tax purposes.

Business systems evaluation: The CRA may undertake a review of your business systems to:

  • ensure the systems meet the CRA record keeping requirements outlined earlier
  • get an overview of the system; this includes configuration options and details of the flow of information through the system and subsystems
  • evaluate the retention and content of electronic data files

Why should you keep complete and organized records?

You are required by law

You are required to keep complete and organized records as stated in the:

  •   Income Tax Act (ITA);
  •   Excise Tax Act (ETA);
  •   Excise Act, 2001 (EA 2001);
  •   Canada Pension Plan (CPP);
  •   Employment Insurance Act (EIA);
  •   Air Travellers Security Charge Act (ATSCA); and
  •   Softwood Lumber Products Export Charge Act, 2006 (SLPECA).

For further information go to www.cra.gc.ca/bt/fq-eng.html

There are benefits for you

record keeping

The After Storage Room

Complete and organized records will:

  • help you identify the sources of your income;
  • remind you of expenses you can deduct and tax credits you can claim;
  • make it easier for you to determine your taxes owing;
  • provide you with information on the past and present financial positions of your business or other organization;
  • help you make good business decisions;
  • assist you in getting loans from banks and other lenders;
  • help to prevent problems if we audit your returns; and
  • possibly help you in selling your business or bringing in new partners.

Consequences of not keeping adequate records 

We may disallow expenses that you are unable to support.

Also, there are penalties if you:

  •   do not keep adequate records;
  •   do not provide CRA officials with access to your records, when requested; or
  •   do not give information to CRA officials, when asked.

See Information Circular IC78-10, Books and Records Retention/Destruction, and GST/HST Memorandum 15.1, General Requirements for Books and Records, for more information on possible penalties and legal action.

How much time and space are you wasting looking for documents?

Let’s face it, records management can be a big job!  Not sure where to begin? I’m here to help you.  Keeping your records and storage room is easy with the Paper Tiger Filing System and you’ll be able to find what you need when you need it!  I’m ready when you are.

The Perfect Garage Organizing Solution

By Blog, Expert Articles, Free Articles, Home Organizing, Quick Organizing Tips, Resources, Uncategorized No Comments

Can you park your car in your garage?  Do you have a shed that is in total chaos?  Well, I have the perfect garage organizing solution for you.

First, hire one of our handy-dandy IABO Organizers, then install the Handiwall System. My
clients love this system and they like it when they can reclaim valuable space in their home!

When I find a great resource, I love to share it with everyone.  In the past month, I’ve organized two garages and the best way I found to organize a garage is to use the Handiwall system.  When I have this system installed for my clients, the garage is their favorite room in their home!  So much so, they love showing neighbors and friends how organized their garage is.  One client loved her garage so much she wanted to have a party.

Keeping your garage organized is fun and easy with this type of system.  No more piles of sports equipment in the middle of your garage or a tangled mess of cords or garden tools falling all over the place!

Another benefit of this amazing garage organizing system is you can move hooks around, add new ones and you don’t have to worry about drilling holes and hanging hooks in your drywall, only to have them fall out and take a chunk of gyperock in the process.  It’s happened to me and I’m sure you know what I’m talking about here.

Check out the Handiwall System here!

Get free garage organizing tips when you post your “Before Photos” on our Facebook Fan Page, click here. Then when your garage is organized, come back and post your “After Photos” on our FaceBook Page.

Here’s to getting your car in the garage!

women, relaxed, office desk, arms up,

Organizing Microsoft Outlook: How to Never Miss an Important Deadline or Appointment Again

By Blog, Business Organizing, Free Articles, Home Office Organization, Organizing Microsoft Outlook, Uncategorized No Comments

Microsoft Outlook is a great organizing tool.  Are you using this powerful tool to the best of its potential? This article is part of a series of articles that will help you as begin organizing your Microsoft Outlook.

The Problem

You need to record to-dos on to your calendar, but you end up collecting scraps of paper everywhere as you jot things down to later transfer to your calendar.  You want to accomplish three big things:

  • Get rid of all those scraps of paper on your desk, in drawers, and lining your pockets
  • You want to have a clear list of what it is you need to accomplish today, and have an easier time planning your day.
  • You want to be able to see what the next action step you need to accomplish is.  Making it easier to cross things off the to-do list.

 Organizing Microsoft Outlook: Your Email Calendar

Your calendar can help you reduce stress and get through your day without missing any important to-dos.  When you get to organizing Microsoft Outlook you will find that your email calendar is a safe and reliable place to keep a number of important tasks. This means you won’t have to worry about forgetting daily tasks (or losing important slips of paper).

What Can I Track?

 Your email calendar is a great place to organize and record these everyday activities:

  • All of your important meetings and appointments
  • Follow-ups with clients or on important projects
  • Calls you need to make
  • You can set an all-day event reminder for time carved out for meetings, conferences, or other events
  • Block out time to work on specific projects
  • Life events: Birthdays, anniversaries, ect.

What Will it Look Like?

What does my email calendar look like?  Outlook gives you choices!  You can view the day, week, or month.  When you are organizing Microsoft Outlook you set your default view to what works best for you.

A Quick Tip: You can set your default view to Work Week. Then customize your view to show Monday through Friday.  This will give you a great view of what you have to accomplish during the week.

Organizing your Microsoft Outlook calendar can be even better accomplished through the use of the color coding system.  Don’t use so many colors that it becomes overwhelming and hard to read, but a sensible use of color can be very helpful.  You’ll be able to see what your day, week, and month hold at a glance and where your priorities are.

 Organizing Microsoft Outlook: Your Email Task List

Your email also contains a task list.  You may be confused about what the difference between your email task list and your email calendar.  Your calendar is for active tasks, items you are committed to doing, they have specific timelines and due dates.  Your task list is for an inactive list, things you intend to do, they don’t yet have a specific timeline or due date.

Using your task list for everyday tasks can create a HUGE list of tasks.  This frequently means that you only do the first couple things on your list and to-dos further down the list just keep going further and further down the list.

What are some good examples of items that work for your task list?  Ideas for future projects, family and friend gift ideas, music or bands you would like to find and listen to, books you want to read, your mission and vision for your business.  Think of your task list as a place for long term brain storming.

A Word of Warning

Another great reason to keep your daily tasks in your email calendar instead of task list, your phone may not sync with the task list.  Some phones, like the iPhone, do not currently sync with task list.  This means when you are away from your computer you would be disconnected from your daily to-dos, a sure way to miss something!

Organizing your Microsoft Outlook so your calendar and task list are handling the jobs best suited to them will help reduce stress and get your day running smoother.  Don’t delay start today!

I want to hear from you!  What is your favorite Microsoft Outlook feature?