MONTREAL CPA FIRM NEAR YOU: RECORDKEEPING – HOW LONG TO KEEP YOUR TAX RECORDS

Introduction to Recordkeeping Requirements
Maintaining accurate and complete financial records is a cornerstone of compliance for both individuals and businesses. The CRA and Revenu Québec require documentation to support all income, deductions, and credits claimed on tax returns. Montreal CPAs assist clients in understanding what records to keep, for how long, and how to organize them effectively to avoid penalties and ensure audit readiness.

Types of Records to Maintain
Financial records include invoices, receipts, contracts, bank statements, payroll records, and expense reports. Montreal CPAs guide clients in determining which documents are mandatory and which are optional but beneficial for future reference. Accurate recordkeeping reduces risk, supports tax filings, and facilitates informed decision-making.

Legal Retention Periods
The CRA generally requires individuals and businesses to retain records for six years from the end of the tax year to which they relate. Revenu Québec has similar requirements. Montreal CPAs provide clarity on retention schedules, including exceptions where records must be kept longer due to ongoing audits, appeals, or specific business activities.

Digital vs. Paper Records
With the rise of digital accounting, businesses may store records electronically. Montreal CPAs advise on compliance with CRA rules for electronic storage, including proper backup, security, and readability. Digital recordkeeping can streamline operations but requires careful planning to ensure legal validity.

Organizing Records Efficiently
Properly organized records allow for quick retrieval, easier audit preparation, and improved financial analysis. Montreal CPAs provide practical strategies for categorizing records by type, date, and purpose, enabling efficient management and reducing administrative burden.

Retention for Specific Industries
Certain industries have additional recordkeeping requirements. For example, construction companies, real estate agents, and retail businesses may need to retain contracts, GST/HST filings, or inventory logs longer. Montreal CPAs tailor advice to specific sectors, ensuring compliance with both general and industry-specific rules.

Supporting Tax Credits and Deductions
Records are critical to substantiate claims for deductions and tax credits. Montreal CPAs guide clients on which documents are required for medical expenses, charitable donations, business expenses, and other deductions. Proper documentation ensures claims withstand CRA scrutiny.

Handling Employee Records
Payroll records, T4 slips, and employment contracts must be retained for a specific period. Montreal CPAs assist businesses in managing employee files, ensuring compliance with CNESST, QPP, and income tax requirements. Accurate employee records protect both employer and employee rights.

Dealing with Audits
During a CRA audit, access to complete records is essential. Montreal CPAs help clients prepare by verifying records, organizing documentation, and anticipating questions. Well-maintained records minimize audit disruption and reduce the likelihood of additional assessments.

Disposing of Records Safely
After the retention period, sensitive records must be disposed of securely. Montreal CPAs provide guidance on secure shredding, digital deletion, and privacy compliance. Proper disposal protects against identity theft and breaches of confidential information.

Records for Non-Residents and Expats
Canadian citizens living abroad or non-residents earning Canadian income must maintain records to support income reporting and tax treaty claims. Montreal CPAs assist clients in understanding retention requirements and international documentation standards.

Tracking Investment Records
Investments, including stocks, mutual funds, and real estate, require detailed records for cost basis, dividends, and gains. Montreal CPAs advise on record retention strategies that simplify reporting, support capital gains calculations, and optimize tax planning.

Small Business Considerations
Small businesses face challenges in recordkeeping due to limited resources. Montreal CPAs provide scalable solutions, including cloud accounting, bookkeeping best practices, and systematic documentation methods to reduce administrative burden.

Records for GST/HST Compliance
Maintaining GST/HST records, including invoices, input tax credit receipts, and filing records, is critical. Montreal CPAs ensure businesses comply with federal and provincial sales tax rules, avoiding penalties and supporting potential audits.

Integration with Accounting Software
Modern accounting software simplifies recordkeeping by automatically storing and categorizing transactions. Montreal CPAs advise on software selection, proper configuration, and data backup procedures, ensuring compliance and operational efficiency.

Records for Legal and Contractual Obligations
Certain contracts, leases, and legal documents must be retained beyond tax requirements. Montreal CPAs help identify documents with legal significance and recommend retention strategies to protect business interests.

Managing Historical Data
Maintaining historical financial data supports trend analysis, financial forecasting, and strategic planning. Montreal CPAs guide clients in balancing long-term retention with practical storage limitations, ensuring useful data is always accessible.

Preparing for Electronic Filing and CRA Requests
Electronic tax filing and CRA requests require records to be accurate, complete, and accessible. Montreal CPAs assist businesses in preparing electronic records, ensuring compliance with submission requirements and reducing potential issues during CRA reviews.

Disaster Recovery Planning
Unexpected events, such as natural disasters or cyberattacks, can compromise records. Montreal CPAs advise on disaster recovery strategies, including offsite backups, cloud solutions, and secure storage to protect critical financial data.

Why Choose Mackisen
Mackisen helps Montreal businesses and individuals establish comprehensive recordkeeping systems that meet CRA and Revenu Québec requirements. Our CPAs provide guidance on retention schedules, organization, digital compliance, and audit preparedness. Choosing Mackisen ensures accurate, accessible, and legally compliant records, giving clients peace of mind and allowing them to focus on growth and financial planning.