File your taxes with confidence
Do you secretly worry that if you put your winter clothes away, it’ll snow? Or that throwing away the receipt for an appliance will cause it to start malfunctioning?
This is exactly the kind of magic thinking that exists around old tax returns: the fear that if you toss them, you’ll need them. While it may be comforting to hang on to tax records until your file cabinet groans under the weight of decades-old returns and receipts, it really isn’t necessary.
Here’s everything you need to know about why you have to hang onto your tax records — and when and how you can get rid of them without anxiety or regret.
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Contrary to the stuff of nightmares, there’s only so far the Canada Revenue Agency (CRA) can dig into your tax history – six years to be exact . This is the length of time you’re legally required to hold onto old tax returns and supporting documents.
The six-year period starts at the end of the tax year to which the records relate. For example, a 2021 return and its supporting documents are safe to destroy at the end of 2027.
If for whatever reason, you wish to destroy your tax records before the six year period is up – say you’re moving to Fiji and want to travel light – you’ll have to get written permission from the CRA first.
Even if you weren’t required to attach information slips, receipts, and expenses at the time you filed or e-filed, they’re an essential part of your tax record. In addition to your tax returns, here’s a laundry list of the supporting documents you’ll need to produce if the CRA comes calling. Be sure to hang onto every scrap that applies.
You need to hang on to your old tax records for the simple reason that the CRA may want to review them.
If this is the case, they’ll send a request for information that asks you for your supporting documents. What happens next is simple, and not scary. All the CRA will do is cross-reference these docs with the information you provided on your tax return. Think of it as a spot check to ensure your reporting is accurate.
If, in the highly unlikely event the CRA wants to audit you, your old tax records will also play a starring role. And again, having them all in one plac e will make the process so much smoother and less stressful.
If you’re certain you don’t need your records for anything else after the six year period has passed, by all means, get rid of them — but do it carefully. Resist the temptation to toss everything in the recycling bin and be on your merry way. Your records contain a lot of personal data that identity thieves would love to get their hands on such as your SIN and employment information.
To properly dispose of paper tax records, shredding is probably your best bet. If you file electronically and decide to keep digital copies of your tax records, be sure your computer is password protected.
After all, having your personal information compromised is way more stressful and inconvenient than being asked to hang onto your old tax records.
