I’ve been going through a paper bag of receipts and forms representing 2008 in preparation for tax time, and in between feelings of boredom (self-explanatory) and amazement (so that’s where those hoop earrings went) is one of resentment: When did life become about the organization of bits of paper? And when can I dump the stacks of the past?
Which leads me nicely to this week’s Ask an Expert question, generated from Chatelaine’s Money Maven’s forum:
“How long do you need to keep certain financial records (tax returns and supporting documents, credit-card statements, utility bills, investment statements) and what’s the best way to dispose of them?”
Our expert is Christie Henderson, a chartered accountant, certified financial planner, trust and estate practitioner and the managing partner of Henderson Partners in Oakville, Ont., and here’s her advice:
The answer, according to the Canada Revenue Agency (CRA) is 6 years. The books and records should be kept in Canada at your residence or place of business and must be made available to CRA should they ask to see them.
Even though CRA can’t go back and audit your tax return after 6 years – unless they suspect fraud and then everything is fair game – you should keep purchase receipts and investment statements for assets you still own. You may need them should you ever need to make an insurance claim. And you may need proof of an asset’s cost in the future if you sell and the gain or loss must be reported on your tax return.
As the fastest-growing form of fraud, identity theft could result in the destruction of your credit record among other things. We would highly recommend you have your old tax documents shredded once you are no longer required to keep them.
