You can only claim an expense if you can prove it. The CRA focuses heavily on documentation, and missing paperwork is one of the most common reasons deductions get denied. The good news: with a simple system, you can protect every legitimate write-off.

What CRA requires

For every business expense, you should have:

1. A receipt showing:
• Vendor name
• Date
• Item(s) purchased
• Amount paid
• Sales tax details

2. Proof of payment such as:
• Bank or credit card statement
• Cleared cheque
• e-Transfer confirmation

3. A business purpose that clearly supports earning income
A note on the receipt is often enough (examples: “client meeting,” “equipment repair”).

If any of the three pieces are missing or unclear, CRA can reduce or deny the claim.

Digital receipts are acceptable

Electronic copies are fully valid if they are:

• Clear and readable
• Stored with backup
• Easily accessible if requested

Scanning paper receipts protects against fading or loss.

How long to keep records

In most cases, CRA requires businesses to retain records for six years after the end of the tax year they relate to.

Do not throw documents away after filing — the audit window is long.

Special documentation requirements

Some categories have extra rules:

• Vehicle expenses: mileage log required
• Meals and entertainment: record who you met and why
• Home office: square footage calculations and proof of costs
• Mixed-use items: percentage allocation must be supported

These details make the deduction defensible.

Systems that make compliance easy

You do not need expensive software to stay organized. Even a few simple habits go a long way:

• Take a photo of every receipt the moment you get it
• Sort documentation into categories monthly
• Reconcile statements to expenses consistently
• Keep business and personal spending separate

Small steps now avoid big headaches later.

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