If you are one of those people who have some business expenses to claim and you know that you are allowed to do so, then you basically follow what the CRA tells you to do, but are you really protecting yourself against potentially denied claims?
You may be under the assumption that all you have to do is keep your receipts in the case of the requirement for further proof should the CRA ask for it. This is a common occurrence when it comes to gas and mileage receipts.
Like most there is a chance that you may be paying for your gas with your credit cards. What you may not know is that the CRA could reject those expenses paid this way. The reason for this is because you could possibly be getting cash back during your transaction. So you may have paid for $50. worth of gas and got back $30. in a cashback however, your receipt shows $80.
We are often telling you how important it is to keep good records. Sometimes your records will be accepted at face value, but there are other times where more extensive record keeping is imperative. This is often the case for those who are claiming travel expenses. These expenses can really add up and they can increase substantially every year, especially if your business is growing or expanding. When the CRA sees a big jump in these types of expenses it can raise a red flag. You need to be fully prepared to back up your travel claims.
This is where detailed record keeping is going to be your best friend. It is a little time consuming but if you don’t want to be denied your claims then it is well worth it. Keeping a travel calendar up to date is one good step. On this you should note the location of the meeting, the name of the organization, the purpose of the meeting and the mileage. This will give you all of the information that you will need to meet any potential challenge of expenses you may have claimed for that particular business meeting.
When it comes to keeping good records, more is better when it comes to supporting your business expenses. It also gives your business accountant lots to work with so he can file your taxes in a way that is most advantageous to you.
