Here is the 2nd part of our blog series:
If you are carrying on a business of any size, be it a sole proprietorship or a large corporation, you must keep record of all documents that provide the ability to calculate payable taxes. Your records must be supported by “source documents” in order to corroborate the amounts in these records, often known as “books.” Source documents may include things such as sales invoices, receipts for purchases, deposit slips, cheques and contracts. A recent article by TaxTips does a great job of outlining some of the must-knows regarding business financial records, so we decided to summarize their article for you on our blog.
For income tax purposes, all your financial records and corresponding source documents must be retained for a minimum of six years after the end of the last tax year for which they pertain. In the case of capital purchases, this can be slightly more complicated because the last tax year to which they relate is probably much later than the actual date of acquisition. If the capital property is disposed, purchase records are still required to calculate the gain or loss at the time of this disposal. Therefore, records pertaining to capital properly should be kept until six years after the capital property was disposed, sold etc. This may be many years after the initial date of purchase.
There are some records that the business of a person (not a corporation) that must be retained for six years after the tax year that the business ceased or ended. These include:
• The general ledger containing the summaries of the year-to-year transactions of the business
• Any contracts or agreements that are necessary to understand the entries in this book
The records that a corporation must keep until the business is dissolved include:
• Minutes of the meetings of directors of a corporation
• Minutes of the meetings of the shareholders of the corporation
• Records of the corporation that contain details regarding the ownership of the shares of capital stock and any transfers of such stock, the GL or other book containing the summaries of the year-to-year transactions of the corporation
• Any special contracts or agreements that are necessary to understand the entries in this book
Article source: http://taxtips.ca/smallbusiness/booksandrecords.htm
About Kustom Design Group
Kustom Design is a group of interconnected companies, each company striving for the same goal: to provide excellent Accounting and Financial products and services to help clients SAVE on taxes, properly manage their finances and ultimately, achieve Financial Freedom and Lasting Wealth.
The Kustom Design Group offers a complete line of products and services in key areas of accounting, finance and tax; from accounting, consulting and strategic planning to financial and tax education. Visit our website for more information about our products and services http://www.kustomdesign.ca/.
Contact Us: http://www.kustomdesign.ca/ | Calgary, AB | (403) 219-0602
For income tax purposes, all your financial records and corresponding source documents must be retained for a minimum of six years after the end of the last tax year for which they pertain. In the case of capital purchases, this can be slightly more complicated because the last tax year to which they relate is probably much later than the actual date of acquisition. If the capital property is disposed, purchase records are still required to calculate the gain or loss at the time of this disposal. Therefore, records pertaining to capital properly should be kept until six years after the capital property was disposed, sold etc. This may be many years after the initial date of purchase.
There are some records that the business of a person (not a corporation) that must be retained for six years after the tax year that the business ceased or ended. These include:
• The general ledger containing the summaries of the year-to-year transactions of the business
• Any contracts or agreements that are necessary to understand the entries in this book
The records that a corporation must keep until the business is dissolved include:
• Minutes of the meetings of directors of a corporation
• Minutes of the meetings of the shareholders of the corporation
• Records of the corporation that contain details regarding the ownership of the shares of capital stock and any transfers of such stock, the GL or other book containing the summaries of the year-to-year transactions of the corporation
• Any special contracts or agreements that are necessary to understand the entries in this book
Article source: http://taxtips.ca/smallbusiness/booksandrecords.htm
About Kustom Design Group
Kustom Design is a group of interconnected companies, each company striving for the same goal: to provide excellent Accounting and Financial products and services to help clients SAVE on taxes, properly manage their finances and ultimately, achieve Financial Freedom and Lasting Wealth.
The Kustom Design Group offers a complete line of products and services in key areas of accounting, finance and tax; from accounting, consulting and strategic planning to financial and tax education. Visit our website for more information about our products and services http://www.kustomdesign.ca/.
Contact Us: http://www.kustomdesign.ca/ | Calgary, AB | (403) 219-0602
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