Running a small business is no small feat, and managing the paperwork that comes with it can often feel like a daunting task. From invoices to tax returns, we all deal with a flood of mail and emails. Sorting through it all can be overwhelming, especially when important documents related to your taxes arrive sporadically throughout the year.
That’s why we’ve put together this helpful guide to highlight which documents are crucial for your business — and share some tips on how to keep them safe and organized for tax time.
Storing documents safely: digital vs. analog
Digital storage
In today’s digital age, cloud storage solutions like Google Drive, Dropbox and iCloud are convenient ways to store and access important business documents from anywhere. If you’re looking for something even more secure, consider using platforms like Hubdoc or Receipt Bank, which not only offer robust online storage but also integrate with your bookkeeping software. Ask us about how to get a free Receipt Bank account!
Analog storage
For those who prefer a more traditional approach, setting up an effective filing system can make all the difference. Keep your documents organized in a way that makes sense to you — whether that’s by category, date or another method. Use a separate folder for important items like bank statements, corporate documents and receipts. Pick up a True North document bag from us, and use it in your vehicle for that paperwork you pick up on the go but need to keep it safe.
Important documents you should keep safe
Here’s a rundown of 17 documents you should make sure to keep secure this year, along with some tips on how to stay on top of them.
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Prior year tax returns
Your accountant will provide these documents, so be sure to keep them safe. If you handle your own taxes, it’s a good idea to store a PDF in a secure location. Should you decide to switch accountants, they will need last year’s tax return to get started. Plus, your prior year’s return will contain your payment schedule, which is handy for reference throughout the year.
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Notice of assessment (NOA)
A few weeks after filing your tax return, you’ll receive a Notice of Assessment (NOA). Be sure to store this with your other tax documents. The NOA also includes a payment voucher, which you’ll need to make tax payments at the bank. Keep in mind that banks now require the original vouchers. Additionally, the NOA will show your RRSP contribution limit. -
Corporate annual return
If you have a corporation, you’ll receive a notice to file your Corporate Annual Return each year, typically around your incorporation anniversary. While this isn’t a tax filing, it’s your responsibility to submit it to Alberta Registries and pay the $84 filing fee. Failing to do so for 30 months can lead to your corporation being dissolved. Many business owners pay their lawyer to maintain the minute books and handle this filing, but True North also offers this service. -
Property transactions
Whether you’ve purchased or sold a principal residence, vacation property or investment property, it’s important to keep all related documents. These records can be essential for tax purposes. -
Stocks and investments
For those who trade stocks or hold investments, keep the summary of realized gains and losses. You can obtain this from your financial institution. Also, save your investment statements, which show year-end balances and management fees (a potential tax deduction). If you’ve borrowed money for investment purposes, keep all related loan statements as well. -
Professional and union dues
Keep invoices and proof of payment for any professional or union dues. You’ll also want to retain records of any professional development hours you complete. -
Mortgage statement
For those claiming a home office deduction, the mortgage statement is key. It will show the interest portion of your mortgage payments, which is deductible. Keep this statement safe as part of your home office records. -
Official donation tax receipts
Donation receipts are an important part of your tax deductions. Be sure to keep the original signed copies, and remember that you can carry forward unused receipts for up to five years. -
RRSP contribution slips
Always verify your RRSP balance before contributing to avoid over-contribution. The financial institution will provide RRSP contribution slips after you’ve made a contribution — keep them in a secure place. -
Tuition and student loans
Keep your T2202A forms for tuition, along with any bills related to eligible tuition expenses. If you have student loans, retain the annual statements that show the interest you’ve paid. -
Daycare, dayhome and nanny bills
If you claim tax deductions for daycare or childcare services, be sure to keep the bills and invoices. Keep in mind that payments made "under the table" are not deductible. Read more about this in our blog about child care. -
Health insurance and medical expenses
Medical expenses, such as insurance premiums, are often one of the largest expenses you’ll have. Keep track of these along with any other medical expenses that exceed the minimum threshold for deductions.
Medical expenses are subject to a minimum threshold before they become eligible for a tax deduction. This threshold is the lower of 3% of your net income or $2,268. For example, if your net income is over $75,600, the threshold would be $2,268. Let’s say your insurance premiums amount to $1,500, and you incur an additional $2,000 in medical expenses, bringing your total medical expenses to $3,500. To calculate your eligible claim, subtract the $2,268 threshold from your total expenses, leaving you with a claimable amount of $1,232. However, if your total medical expenses fall below the threshold, you won’t be able to claim them. -
Separation, divorce and support agreements
Retain the original signed copies of any separation, divorce or support agreements. These may be necessary for tax or legal purposes. -
T2201: disability tax credit certificate
This form must be completed and signed by a medical practitioner. Once approved by the CRA, it can help you claim the Disability Tax Credit, so be sure to keep it in a secure
location. -
Moving expenses
If you’ve moved for work, you may be eligible to claim moving expenses that weren’t covered by your employer. Keep receipts for travel and any other related expenses. -
Foreign income statements
Any statements showing income earned from investments, pensions or rentals outside of Canada should be kept on file for tax purposes. -
T slips
T3, T5, T4RSP and other T slips might not always be readily available in your CRA account, so it’s essential to keep track of them. These slips report various types of income, and failure to report them could result in penalties.
T3 and T5 slips: Report investment income and income from trusts
T4RSP: Document income withdrawn from your RRSP
T4PS: Reflect allocations from an Employee Profit Sharing Plan
T5013: Summarize income from a partnership
T5018: Outline contract payments, specific to the construction industry
T2200: Detail eligible employment expenses
T2202A: Confirm tuition expenses for tax purposes
Need help with your paperwork?
As Chartered Professional Accountants (CPAs), we’re here to help you stay on top of your important documents and ensure your small business remains compliant with tax laws. If you have any questions or need help organizing your records, don’t hesitate to reach out. We offer bookkeeping and tax services to small business owners in Okotoks and Calgary, helping you with everything from deductions and write-offs to tax returns and GST filing.
Read more about Bookkeeping topics that may be helpful to you and your small business.
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