6 Tips to Survive an Audit (1/6)

Nobody expects to be audited. But with at least 434,000 Canadians investigated every year many are left flat-footed when the inquiry letter arrives. Make sure you're prepared by following these easy steps to securing an accurate and fair audit.

1. Be Audit Ready

1. Be Audit Ready

The CRA can go back four years from the date you mailed your return, so be sure to keep proper files. Disorganized or incomplete records can cause auditors to assume you’ve either made a mistake or are hiding something.

Insider advice: There is excellent bookkeeping software (such as QuickBooks, Sage Simply Accounting or GnuCash), but a computer program will only be as good as your paper-based method. The best tool? A simple accordion folder with multiple pockets can help keep sortedout records in one place. Ideally, tax-return files should be separated by year and divided into main categories, including income, expenses/deductions and investments. Store all financial documents that you would need to prove the numbers on your return. By law, records must be stored in Canada, and can be ditched only after seven years.

First   1   . . .   »   Last