Just Got Audited?

Nobody enjoys getting a CRA audit.

It could end up in your business paying back taxes, penalties, and interest; and even if that doesn’t happen, it still costs time and effort in complying with their requests. This is time you could’ve spent working on your business.

What leads to getting audited?

Claiming strange expenses. Reporting revenue and/or profit that’s significantly different from your industry peers. Mixing personal and business expenses.

How can you improve your odds of avoiding a CRA audit in the future?

Proper transaction classification, including knowing the difference between an expense and an asset purchase. Keeping personal expenses separate from your business records, even if your business is not incorporated. Make sure the expenses you claim are legitimately for business purposes.

Finally, and perhaps most importantly, actually staying on top of your bookkeeping. Waiting until year-end or later – or worse, not doing it at all – not only invites problems with CRA, but it means you’re missing out on valuable information you could be using to manage your company.