What documents and receipts to keep for filing your taxes
Freedom 55 Financial - Feb 01, 2021
Need help figuring out what you need to submit? This guide can help you prepare
Do you have boxes full of papers because you’re not sure what you need to keep for tax purposes? There’s no time like the present to gather and organize your tax documents. Whether your records are electronic or paper format, these guidelines will help you understand which papers you need to save and which you can throw away.
What do you need to file your taxes?
It’s a great idea to keep a physical or electronic folder handy where you typically open your mail. You can quickly and easily file important paperwork so you’re ready when it’s time to file your taxes. One handy document is the Notice of Assessment (mailed out in July), which contains important info like your registered retirement savings plan (RRSP) contribution room. It’s smart to create an online account with the Canada Revenue Agency so you can access all tax information online.
Tax return checklist
Most tax documents are marked with “tax year”, which is often different than the year when it was sent or received. Some types of tax forms you may need are:
There are many different T4s, but all show income you’ve received, whether it was from employment, employment insurance, Canada Emergency Response Benefit or another form of income.
There are also many different T5s, but all show investment income you’ve received, which is taxable. If you have a high amount of taxable investment income, see your financial security advisor about opening a Tax-free savings account (TFSA) or other available options.
T2202 Tuition slips
The Tuition Enrolment Certificate allows you to claim a deduction for tuition paid to eligible post-secondary programs.
Donations to registered charities are typically eligible for a tax deduction. Many charities issue a receipt for a donation of $20 or more. If your charitable donation was less than $20, but you have a record, you may be able to still claim the deduction. Ask your tax advisor whether or not a deduction would apply. You can find more information about deductions, credits and expenses from the Canada Revenue Agency’s website.
Other types of receipts for deductions
If you paid support for a spouse or child, moved to be closer to school or work, or paid daycare fees, you may be eligible for a deduction. Depending on your individual employment situation, you may be able to claim certain home office expenses on your taxes or directly to your employer for a partial reimbursement.
If you don’t have one of the documents listed in the tax return checklist above, contact the issuer to let them know.
What paper records should you keep and for how long?
You may be wondering how long you should keep income tax paperwork. The CRA recommends keeping it for six years past the end of the tax year. If in doubt, keep the document.
How can I dispose of documents safely?
While you might not need to keep a document, it may still have personal information you don’t want to end up in the wrong hands. If you’re up to date with your papers and only have a few documents to dispose of at a time, you can get a small paper shredder. Then you can simply recycle your shredded papers with your other household recycling. However, if you’ve got years’ worth of papers to dispose of, you can contact a paper shredding service. For a fee, this service can help you securely dispose of larger amounts of personal papers.
What should I do if I have questions?
You don’t have to do this alone. If you’re uncertain about which documents you need or if you have questions, contact me.