As promised I am going to show you how to reconcile your slips and personal expenses to avoid potential penalties.
If you followed my tips on the previous blog you are ready to start project number 2.
1) Gather all bank statements for the year 2014. By the way, you can actually label a folder ”bank statements 2014” and place them there.
2) Follow the same procedure with your credit card statements. If you work with more than one bank, have a folder for each one.
3) Add all income deposited on your bank account
4) Follow the same adding procedure with all dental expenses paid from your accounts, and RSP contributions, other investments, etc.
5) Verify if the amount from your personal accounts match your slips. If your slips show an amount less than what left from your bank account, it means you are missing a slip.
6) Any amounts on your bank account that do not match your slips, you will need to find out if it is a loan, or refunds from the government, or even reimbursement for a favour you made to someone. Once you find out the discrepancy, make sure you document it and attach source documents as proof.
This project may take an hour or so depending on the number of transactions and number of banks you work with. However, it will help you correct any mistakes or acquire evidence to avoid problems with CRA a few years from now if you are audited.
If you want to use my spreadsheet for reconciliation, please email me and I will send it to you promptly.
“Reduce risks, pay on time, be efficient and save money and time.” Renata Magalhaes