It’s tax time again….where are your receipts?

When it comes to handling receipts, it is important to have a system in place to ensure you can find your receipts when you need them! Here are a few tips to help you create a receipt system that will save time, money and ease frustration at tax time:

Step One: The first step is to implement a system for your wallet, purse or vehicle – wherever receipts collect. The key to being able to find important receipts when you need them is to put them in the same place every time – both when you receive them and when you get home. Don’t stuff them in your pants pocket or let clerks put them in the bags, and don’t let them linger in your wallet or purse.

Step Two: The next step is to (daily or weekly) empty your receipts into an appropriate file folder or container: one for short-term receipts, one for taxes and one for warranty items, reimbursements or rebates. Separate short-term receipts (like ATM slips and grocery receipts that only need to be kept 1-3 months) from long-term receipts (such as tax-related receipts or sales slips for major purchases). Some folks will have a third category: receipts that they need for reimbursement or rebates. If you’re an employee who regularly travels or entertains clients, you’ll want to include this category so you can get paid back for your expenditures.

Step Three: At the end of each month, check your short-term receipts against any bank or credit card statements. If they are not tax related and you’ve satisfactorily used the item and checked that it has no warranty, the receipt can then be tossed.

Step Four: At the end of the year, gather all your tax related receipts and put them with your tax return. Once your taxes are complete you can then file the receipts away and start fresh again with empty folders for the new year.

Toss Every Month:

  • ATM And bank-deposit slips – after you’ve recorded the amounts in your check register and checked it against your monthly bank statement.
  • Grocery receipts – check first to make sure the item appears correctly on your monthly bank or credit card statement.
  • Sales receipts for minor purchases or any receipts for items that cannot be returned or claimed on your taxes – after you’ve satisfactorily used the item and checked that it has no warranty, the receipt can be tossed.

Toss After One Year:

  • Monthly bank and credit-card statements – if you don’t itemize deductions to claim on your taxes.
  • Monthly or quarterly brokerage and mutual-fund statements – after you’ve reconciled them with your year-end summary.
  • Monthly mortgage statements – as long as your year-end statement clearly shows the total amount you’ve paid in interest and property taxes over the course of the year.
  • Phone and utility bills – as long as you don’t have a home office, use your phone for business calls, or anticipate any need to prove long-term residency.
  • Paycheck stubs – after you’ve reconciled them with your annual T-4 slip.

Retain for Seven Years:

  • Annual Tax Returns and Receipts, if you deduct any portion for personal or business expenses.
  • Canceled checks and receipts/statements for annual mortgage interest and property taxes, deductible business expenses, child-care bills, out-of-pocket medical costs, or any other tax-deductible expense.
  • Your Tax Assessment Forms from Revenue Canada or tax summaries from financial-services companies.

Keep Indefinitely:

  • Property Tax Forms keep until you sell your home.
  • Home Improvement Receipts keep for as long as you own the home.
  • Investment Confirmation Slips that list the purchase price of any investments you own.
  • Insurance Papers keep for the length of your insurance policy.
  • Legal Papers or any receipts related to a legal dispute. Keep until issue is settled.
  • Receipts for Major Purchases or any item whose replacement cost exceeds the deductible on your homeowners’ or renters’ insurance policy.
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About Author: Linda Andersson
Executive Organizer and Microsoft Office Specialist Master

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