What records should you keep?

The CRA says you are required by law to keep records of all your transactions so you can support your income and expense claims. You should keep a record of your daily income and expenses. Do not send those records in with your income tax return — keep them in case the CRA asks to see them later.

The CRA does not pick one brand of book for you. You can use a book with columns and separate pages for income and expenses, or clear computerized records.

Keep separate records for each business you run. Also keep duplicate deposit slips, bank statements, and cancelled cheques.

Income records should include the date, amount, and source of the income. Record income whether you received cash, property, or services, and support entries with original documents. The CRA lists examples such as:

• sales invoices
• cash register tapes
• receipts
• bank deposit slips
• fee statements
• contracts

Expense records: the CRA says to always get receipts or other vouchers when you buy something for the business.

These rules are about keeping proof. This lesson does not tell you which costs you may deduct, how to fill a tax form, or how much tax you owe. That is work for you and a qualified professional, using current CRA pages.

A simple habit is to write income and expenses on the day they happen, in one place you can find again.