Preparing for Business Tax

Business Income Records

Collect all documents that prove your total "gross" revenue before expenses.

• Sales Invoices: All invoices issued, whether paid by cash, credit, or e-transfer.

• Payment Processor Reports: Annual summaries from platforms like Stripe, PayPal, or Square.

• T4A Slips: Statement of income for services performed as a contractor or freelancer.

• Bank Statements: Monthly statements for all business accounts to reconcile against your records.
   

Operating Expense Receipts

The CRA requires original receipts or digital copies for all deductions. Credit card statements alone are often insufficient for an audit.

• Advertising: Costs for social media ads, Google Ads, business cards, and website hosting.

• Professional Fees: Fees paid to lawyers, accountants, or consultants for business advice.

• Office Supplies: Stationery, stamps, and small software subscriptions.

• Meals & Entertainment: Typically 50% deductible; you must note the client’s name and business purpose on the receipt.

• Business Insurance: Premiums for commercial liability or business property insurance.
   

Vehicle & Home Office Proof

These are high-scrutiny areas for the CRA and require specific tracking.

• Mileage Log: A detailed log showing dates, destinations, and business vs. personal kilometers driven.

• Vehicle Costs: Receipts for fuel, oil, repairs, insurance, and lease or loan interest.

• Home Workspace: Total square footage of your home vs. the dedicated business area.

• Shared Home Expenses: Annual totals for heat, electricity, insurance, property taxes, or rent.
   

GST/HST & Payroll (If Applicable)

• GST/HST Returns: Records of all sales tax collected and Input Tax Credits (ITCs) paid on expenses.

• Payroll Data: If you have employees, gather T4 slips and records of CPP/EI remittances.

• Capital Assets: Invoices for large purchases like computers, furniture, or machinery to calculate Capital Cost Allowance (CCA).